Helmerich and Payne Inc (HP)
Interest coverage
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 606,392 | 610,662 | 570,981 | 454,555 | 237,233 | 50,522 | -125,266 | -222,371 | -376,325 | -405,916 | -383,541 | -367,342 | -743,332 | -610,120 | -497,995 | -621,369 | -1,353 | -27,127 | -37,482 | 151,429 |
| Interest expense (ttm) | US$ in thousands | 17,300 | 17,283 | 17,245 | 17,293 | 17,444 | 19,203 | 20,970 | 22,561 | 23,930 | 23,955 | 24,015 | 24,177 | 24,513 | 24,474 | 26,363 | 26,495 | 26,567 | 25,187 | 23,615 | 23,351 |
| Interest coverage | 35.05 | 35.33 | 33.11 | 26.29 | 13.60 | 2.63 | -5.97 | -9.86 | -15.73 | -16.94 | -15.97 | -15.19 | -30.32 | -24.93 | -18.89 | -23.45 | -0.05 | -1.08 | -1.59 | 6.48 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $606,392K ÷ $17,300K
= 35.05
To analyze Helmerich & Payne, Inc.'s interest coverage, we use the interest coverage ratio, calculated as EBIT (earnings before interest and taxes) divided by interest expense. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income.
Looking at the data, we observe a positive trend in interest coverage from the beginning of 2022 to the end of 2023. The interest coverage ratio significantly improved from negative values in the first two quarters of 2022 to positive values in the subsequent quarters. This suggests an enhanced ability to cover interest payments from operating income.
The interest coverage ratio saw a substantial increase in the latest quarter of 2023, reaching 29.43, signifying a robust ability to cover interest expenses. This improvement may indicate better earnings performance or lower interest expenses.
The trend further indicates a consistent positive trajectory for interest coverage, indicating that Helmerich & Payne, Inc. has been able to generate sufficient operating income to cover its interest expenses effectively. This positive trend in interest coverage enhances the company's creditworthiness and financial stability, as it demonstrates the ability to meet its debt obligations from operational earnings.
Overall, the improvement in the interest coverage ratio reflects positively on Helmerich & Payne, Inc.'s financial strength and ability to manage its debt obligations. However, it's important to monitor this ratio over time to ensure the company's continued ability to meet its interest expenses.
Peer comparison
Dec 31, 2023