Intel Corporation (INTC)
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 | 1,654,000 | -2,060,000 | -2,273,000 | -2,479,000 | 8,261,000 | 14,239,000 | 21,315,000 | 27,989,000 | 22,300,000 | 24,608,000 | 22,807,000 | 23,054,000 | 25,707,000 | 26,247,000 | 27,872,000 | 26,610,000 | 24,546,000 | 22,136,000 | 22,561,000 | 23,347,000 |
| Interest expense (ttm) | US$ in thousands | 878,000 | 760,000 | 670,000 | 565,000 | 496,000 | 481,000 | 511,000 | 531,000 | 597,000 | 611,000 | 627,000 | 684,000 | 629,000 | 589,000 | 536,000 | 485,000 | 488,000 | 511,000 | 513,000 | 494,000 |
| Interest coverage | 1.88 | -2.71 | -3.39 | -4.39 | 16.66 | 29.60 | 41.71 | 52.71 | 37.35 | 40.27 | 36.37 | 33.70 | 40.87 | 44.56 | 52.00 | 54.87 | 50.30 | 43.32 | 43.98 | 47.26 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,654,000K ÷ $878,000K
= 1.88
Intel Corporation's interest coverage ratio fluctuated significantly over the past two years. The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A ratio below 1 indicates that the company is not generating enough earnings to cover its interest expenses.
Looking at the trend, Intel's interest coverage ratio was above 1 from December 2020 to March 2023, indicating that the company was able to cover its interest payments with its operating income during this time. However, there was a sharp decline in the ratio in the second and third quarters of 2023, where the ratios were negative (-2.71, -3.39, -4.39). This signifies that Intel's operating income was not sufficient to cover its interest expenses during these periods.
It is essential to further investigate the reasons behind the sudden deterioration in the interest coverage ratio to determine if it was due to a decrease in operating income, an increase in interest expenses, or a combination of both factors. This analysis can provide insights into Intel's financial health and its ability to manage its debt obligations in the future.
Peer comparison
Dec 31, 2023