Howmet Aerospace Inc (HWM)
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 | 1,565,000 | 1,455,000 | 1,353,000 | 1,268,000 | 1,193,000 | 1,076,000 | 941,000 | 883,000 | 835,000 | 766,000 | 691,000 | 650,000 | 606,000 | 732,000 | 711,000 | 569,000 | 766,000 | 890,000 | 1,120,000 | 953,000 |
| Interest expense (ttm) | US$ in thousands | 182,000 | 194,000 | 204,000 | 210,000 | 218,000 | 223,000 | 226,000 | 228,000 | 229,000 | 230,000 | 236,000 | 268,000 | 282,000 | 300,000 | 314,000 | 369,000 | 388,000 | 394,000 | 403,000 | 344,000 |
| Interest coverage | 8.60 | 7.50 | 6.63 | 6.04 | 5.47 | 4.83 | 4.16 | 3.87 | 3.65 | 3.33 | 2.93 | 2.43 | 2.15 | 2.44 | 2.26 | 1.54 | 1.97 | 2.26 | 2.78 | 2.77 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,565,000K ÷ $182,000K
= 8.60
Interest coverage ratio measures a company's ability to meet its interest obligations on outstanding debt. A higher ratio indicates a stronger ability to cover interest payments.
For Howmet Aerospace Inc, the interest coverage has shown fluctuations over the reported periods. It started at around 2.77 in March 2020, indicating the company could cover its interest payments approximately 2.77 times. The ratio remained relatively stable until March 2021 when it decreased to 1.54, signaling a potential strain on meeting interest payments.
However, the company improved its interest coverage ratio gradually from June 2021 onwards, reaching 8.60 by December 2024. This significant increase indicates a strengthened ability to cover interest expenses, potentially reflecting improved profitability or lower interest costs.
Overall, the trend in Howmet Aerospace Inc's interest coverage ratio shows volatility but with an increasing trend in recent periods, suggesting better financial health and a reduced risk of defaulting on interest payments.
Peer comparison
Dec 31, 2024