Lumentum Holdings Inc (LITE)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | -149,900 | -266,000 | -330,900 | -386,000 | -371,900 | -285,800 | -225,700 | -152,100 | -65,200 | 34,400 | 121,700 | 226,100 | 315,300 | 298,200 | 518,500 | 546,700 | 529,800 | 513,800 | 308,700 | 265,600 |
| Interest expense (ttm) | US$ in thousands | 22,200 | 22,200 | 25,500 | 29,600 | 33,800 | 37,800 | 37,500 | 36,700 | 35,500 | 52,600 | 63,600 | 71,800 | 80,200 | 71,700 | 68,400 | 67,600 | 66,700 | 64,600 | 63,800 | 65,800 |
| Interest coverage | -6.75 | -11.98 | -12.98 | -13.04 | -11.00 | -7.56 | -6.02 | -4.14 | -1.84 | 0.65 | 1.91 | 3.15 | 3.93 | 4.16 | 7.58 | 8.09 | 7.94 | 7.95 | 4.84 | 4.04 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-149,900K ÷ $22,200K
= -6.75
The interest coverage ratio for Lumentum Holdings Inc. demonstrates a trend of deterioration over the reported periods. Initially, the company exhibited a relatively healthy coverage with ratios of 4.04 as of September 30, 2020, increasing to 7.95 by March 31, 2021, indicating that earnings before interest and taxes (EBIT) substantially exceeded interest obligations during this period. This upward trajectory persisted through 2021, reaching a peak of 8.09 at September 30, 2021, suggesting robust capacity to meet interest payments.
Subsequently, a decline becomes evident starting from December 31, 2021, when the ratio decreased to 7.58. The downward trend accelerates through 2022 and into 2023, with ratios falling sharply to 4.16 on March 31, 2022, and further declining to 0.65 by March 31, 2023. The nearing of the ratio towards zero indicates diminishing ability of EBIT to cover interest expenses, approaching a breakeven point.
From June 30, 2023, onwards, the ratios turn negative, reflecting that EBIT has become insufficient to cover interest expenses, and may even translate into negative earnings before interest and taxes. This is confirmed by the ratios of -1.84 on June 30, 2023, and further declines to -13.04 as of September 30, 2024. The persistent negative ratios over subsequent periods suggest the firm has been experiencing significant difficulties in generating earnings sufficient to cover interest obligations, indicating potential financial distress.
Overall, the trajectory from initially strong interest coverage ratios to sustained negative values signals a concerning decline in the company's profitability or operating earnings, which could imply increased financial risk and potential liquidity issues if these trends continue.
Peer comparison
Jun 30, 2025