Patterson-UTI Energy Inc (PTEN)
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 | 360,314 | 364,800 | 427,884 | 354,091 | 208,118 | -267,690 | -432,277 | -575,179 | -675,269 | -440,009 | -463,867 | -513,954 | -890,248 | -847,319 | -1,038,996 | -926,608 | -455,174 | -583,713 | -357,403 | -317,554 |
| Interest expense (ttm) | US$ in thousands | 52,870 | 42,247 | 37,597 | 38,517 | 40,256 | 42,780 | 42,488 | 42,534 | 41,978 | 38,670 | 39,275 | 39,555 | 40,770 | 61,679 | 71,130 | 73,444 | 75,204 | 59,931 | 51,568 | 50,937 |
| Interest coverage | 6.82 | 8.63 | 11.38 | 9.19 | 5.17 | -6.26 | -10.17 | -13.52 | -16.09 | -11.38 | -11.81 | -12.99 | -21.84 | -13.74 | -14.61 | -12.62 | -6.05 | -9.74 | -6.93 | -6.23 |
December 31, 2023 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $360,314K ÷ $52,870K
= 6.82
Patterson-UTI Energy Inc's interest coverage ratio has shown variability in recent quarters. The interest coverage ratio measures the company's ability to meet its interest obligations with its operating income. A higher ratio indicates a stronger ability to cover interest expenses.
In Q4 2023, the interest coverage ratio was 9.28, indicating the company generated sufficient operating income to cover its interest expenses. This ratio improved from the previous quarter, showing a positive trend.
Q3 2023 saw a further increase in the interest coverage ratio to 11.32, indicating a more robust ability to cover interest payments. This improvement suggests the company's financial health was strengthening.
Q2 2023 displayed a high interest coverage ratio of 12.13, signaling a robust ability to cover interest expenses. This strong performance may indicate effective cost management and operational efficiency.
Q1 2023 reported an interest coverage ratio of 9.18, which, although slightly lower than the previous quarter, still showed a solid ability to meet interest obligations.
In contrast, the interest coverage ratios for Q4 2022, Q3 2022, Q2 2022, and Q1 2022 were significantly lower, with negative ratios recorded in the third and fourth quarters of 2022. Negative ratios indicate that the company's operating income was insufficient to cover its interest expenses during those periods.
Overall, Patterson-UTI Energy Inc's interest coverage has shown improvement in recent quarters, with the company consistently demonstrating a stronger ability to cover its interest payments. However, the negative ratios in the past raise concerns about the company's financial risk and the need for sustained operational and financial improvements.
Peer comparison
Dec 31, 2023