MasTec Inc (MTZ)
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 | -1,010,516 | -989,386 | -906,542 | -923,025 | -830,350 | -620,160 | -528,005 | -381,745 | -110,128 | 262,212 | 312,342 | 296,110 | 234,795 | 195,295 | 278,639 | 2,110,125 | 3,562,812 | 5,109,912 | 6,777,770 | 6,461,110 |
| Interest expense (ttm) | US$ in thousands | 234,405 | 224,606 | 188,935 | 148,907 | 112,255 | 76,348 | 62,554 | 56,996 | 53,414 | 53,643 | 54,105 | 55,084 | 59,629 | 64,213 | 69,957 | 71,772 | 77,026 | 80,566 | 83,599 | 87,771 |
| Interest coverage | -4.31 | -4.40 | -4.80 | -6.20 | -7.40 | -8.12 | -8.44 | -6.70 | -2.06 | 4.89 | 5.77 | 5.38 | 3.94 | 3.04 | 3.98 | 29.40 | 46.25 | 63.43 | 81.07 | 73.61 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-1,010,516K ÷ $234,405K
= -4.31
MasTec Inc's interest coverage ratio has shown significant volatility over the past few quarters. The interest coverage ratio measures a company's ability to meet its interest expenses with its operating income. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
From the data provided, MasTec Inc's interest coverage ratio was consistently below 1 for the periods ending December 2020 to June 2021, indicating a concerning inability to cover its interest expenses with operating income during that time. However, the company started showing improvement from the September 2021 quarter, with the interest coverage ratio turning positive and increasing steadily in subsequent quarters.
The sharp negative spikes in the interest coverage ratio in the first quarter of 2020 and the fourth quarter of 2019 may suggest financial difficulty or a temporary setback for MasTec Inc during those periods. It is worth noting the drastic improvement in the interest coverage ratio in subsequent quarters, reaching remarkable levels by the end of 2019.
Overall, MasTec Inc's interest coverage ratio has experienced fluctuations, showing periods of financial stress followed by recovery and improvement. It is important for investors and stakeholders to monitor this ratio closely to assess the company's ability to meet its interest obligations and its overall financial health.
Peer comparison
Dec 31, 2023