Lumen Technologies Inc (LUMN)
Return on total capital
| 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 | 1,142,000 | -948,000 | -917,000 | -9,645,000 | -9,079,000 | -10,129,000 | -9,634,000 | -448,000 | -276,000 | 3,656,000 | 4,023,000 | 4,270,000 | 4,140,000 | 1,368,000 | 1,185,000 | 1,075,000 | 951,000 | 3,526,000 | 3,543,000 | 3,636,000 |
| Long-term debt | US$ in thousands | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Total stockholders’ equity | US$ in thousands | 464,000 | 342,000 | 466,000 | 504,000 | 417,000 | 2,219,000 | 2,284,000 | 10,995,000 | 10,437,000 | 12,577,000 | 12,219,000 | 12,282,000 | 11,840,000 | 11,183,000 | 11,706,000 | 11,303,000 | 11,162,000 | 13,689,000 | 13,462,000 | 13,291,000 |
| Return on total capital | 246.12% | -277.19% | -196.78% | -1,913.69% | -2,177.22% | -456.47% | -421.80% | -4.07% | -2.64% | 29.07% | 32.92% | 34.77% | 34.97% | 12.23% | 10.12% | 9.51% | 8.52% | 25.76% | 26.32% | 27.36% |
December 31, 2024 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,142,000K ÷ ($—K + $464,000K)
= 246.12%
Lumen Technologies Inc's return on total capital has shown significant fluctuations over the period provided. The ratio started strong at around 27% in March 2020, indicating efficient utilization of both debt and equity to generate returns. However, there was a noticeable decline in the performance in December 2020 and March 2021, with returns dropping to single-digit percentages.
The return on total capital gradually improved in the following quarters, reaching a peak of approximately 35% by December 2021 and March 2022. This period reflected a successful deployment of capital to generate higher returns.
Subsequently, there was a sharp downturn in the company's return on total capital from June 2022 onwards. The ratio turned negative, indicating that the company's capital deployment was not generating sufficient returns to cover the cost of capital.
The negative trend continued into the following years, with significant declines in the return on total capital, reaching as low as -2177% in December 2023. This suggests that Lumen Technologies Inc may have faced challenges in effectively utilizing its capital to generate profits during this period.
The ratio showed some recovery by December 2024, with a return on total capital of 246%. It is essential for investors and stakeholders to closely monitor the company's capital management and profitability in the future to assess its long-term financial health and sustainability.
Peer comparison
Dec 31, 2024