KBR Inc (KBR)
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 | -55,000 | -3,000 | 89,000 | 543,000 | 369,000 | 365,000 | 338,000 | 101,000 | 218,000 | 128,000 | 120,000 | 195,000 | 28,000 | 75,000 | 91,000 | 197,000 | 360,000 | 360,000 | 351,000 | 338,000 |
| Interest expense (ttm) | US$ in thousands | 115,000 | 108,000 | 101,000 | 93,000 | 87,000 | 85,000 | 82,000 | 81,000 | 80,000 | 71,000 | 69,000 | 68,000 | 72,000 | 83,000 | 90,000 | 97,000 | 99,000 | 99,000 | 94,000 | 85,000 |
| Interest coverage | -0.48 | -0.03 | 0.88 | 5.84 | 4.24 | 4.29 | 4.12 | 1.25 | 2.72 | 1.80 | 1.74 | 2.87 | 0.39 | 0.90 | 1.01 | 2.03 | 3.64 | 3.64 | 3.73 | 3.98 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-55,000K ÷ $115,000K
= -0.48
The interest coverage ratio for KBR Inc has fluctuated significantly over the past five years, with values ranging from negative to positive. From December 2019 to June 2020, the company experienced a steady increase in its interest coverage ratio, indicating improved ability to cover interest expenses with operating income. However, this trend reversed in the second half of 2020, with a decline in the ratio.
The interest coverage ratio fell sharply below 1 in the last two quarters of 2020, suggesting that KBR Inc may have had difficulty meeting its interest obligations with its operating earnings during that period. While there was a slight improvement in early 2021, the ratio remained relatively low compared to previous years.
By the end of 2021 and into 2022, the interest coverage ratio showed signs of recovery, exceeding 2 in some quarters. This improvement indicates that KBR Inc's ability to cover its interest expenses with operating income strengthened during this period.
However, the interest coverage ratio declined again in the third quarter of 2022 before increasing in the following quarters. The ratio peaked at 5.84 in March 2023, reflecting a significant improvement in the company's ability to cover interest expenses with its operating income.
Overall, the analysis of KBR Inc's interest coverage ratio highlights periods of both strength and weakness in the company's ability to meet its interest obligations. Investors and stakeholders should closely monitor future financial performance to assess the sustainability of the recent improvement in the interest coverage ratio.
Peer comparison
Dec 31, 2023