Hubbell Inc (HUBB)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	1,091,600	1,059,100	1,031,600	1,018,200	1,038,500	984,900	912,200	815,000	709,100	671,400	613,700	565,300	532,300	479,300	496,300	485,600	494,500	479,200	489,200	524,600
Interest expense (ttm)	US$ in thousands	73,800	69,600	58,700	48,100	36,700	38,400	42,700	46,200	49,600	51,200	52,600	52,600	54,700	55,900	57,400	60,400	60,300	62,000	64,000	65,500
Interest coverage		14.79	15.22	17.57	21.17	28.30	25.65	21.36	17.64	14.30	13.11	11.67	10.75	9.73	8.57	8.65	8.04	8.20	7.73	7.64	8.01

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,091,600K ÷ $73,800K
= 14.79

Interest coverage is a key financial ratio that indicates a company's ability to pay interest expenses on its outstanding debt. Hubbell Inc's interest coverage ratio has experienced fluctuations over the reported periods, starting at 8.01 on March 31, 2020, and gradually increasing to 14.79 by December 31, 2024. The ratio peaked at 28.30 on December 31, 2023.

The general trend shows an improvement in Hubbell Inc's ability to cover interest expenses with its operating income. A higher interest coverage ratio is favorable as it signifies that the company is generating sufficient earnings to meet its interest obligations comfortably. The significant increase in the interest coverage ratio from 2023 to 2024 could indicate a strengthening financial position or effective cost management by Hubbell Inc. Investors and creditors generally look for a consistent and stable interest coverage ratio, suggesting that the company is managing its debt effectively.