Lumen Technologies Inc (LUMN)
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 | 1,142,000 | -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 |
| Interest expense (ttm) | US$ in thousands | 1,372,000 | 1,305,000 | 1,249,000 | 1,170,000 | 1,158,000 | 1,148,000 | 1,216,000 | 1,259,000 | 1,332,000 | 1,424,000 | 1,438,000 | 1,485,000 | 1,522,000 | 1,546,000 | 1,578,000 | 1,608,000 | 1,668,000 | 1,756,000 | 1,843,000 | 1,947,000 |
| Interest coverage | 0.83 | -0.73 | -0.73 | -8.24 | -7.84 | -8.82 | -7.92 | -0.36 | -0.21 | 2.57 | 2.80 | 2.88 | 2.72 | 0.88 | 0.75 | 0.67 | 0.57 | 2.01 | 1.92 | 1.87 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,142,000K ÷ $1,372,000K
= 0.83
Lumen Technologies Inc's interest coverage ratio has exhibited fluctuations over the periods provided. The interest coverage ratio, which measures the company's ability to meet its interest obligations through its earnings, was relatively stable from March 2020 to June 2021, ranging between 1.87 to 0.75. However, there was a significant decline in the ratio from December 2021 to June 2022, indicating potential challenges in servicing its interest payments compared to its earnings.
Subsequently, there was an improvement in the interest coverage ratio from September 2022 to March 2023, where the company showed a better ability to cover its interest expenses. However, this improvement was short-lived, as the ratio sharply dropped from June 2023 to December 2024, reaching negative levels.
The negative interest coverage ratios observed from December 2022 to December 2024 suggest that Lumen Technologies Inc may be experiencing financial distress, as its earnings are insufficient to cover its interest payments during these periods. This trend indicates a potential risk of default on the company's debt obligations if not addressed effectively.
Peer comparison
Dec 31, 2024