Quanta Services Inc (PWR)
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 | 1,347,227 | 1,191,932 | 1,150,196 | 1,120,338 | 1,111,937 | 1,077,684 | 962,493 | 885,990 | 858,281 | 705,553 | 668,377 | 631,287 | 631,937 | 684,577 | 684,692 | 638,015 | 613,327 | 596,946 | 572,944 | 546,262 |
| Interest expense (ttm) | US$ in thousands | 202,687 | 195,843 | 183,424 | 186,292 | 186,913 | 174,843 | 160,878 | 141,328 | 124,363 | 112,989 | 96,682 | 81,152 | 68,899 | 54,147 | 47,937 | 43,482 | 45,013 | 52,533 | 59,853 | 67,020 |
| Interest coverage | 6.65 | 6.09 | 6.27 | 6.01 | 5.95 | 6.16 | 5.98 | 6.27 | 6.90 | 6.24 | 6.91 | 7.78 | 9.17 | 12.64 | 14.28 | 14.67 | 13.63 | 11.36 | 9.57 | 8.15 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $1,347,227K ÷ $202,687K
= 6.65
Quanta Services Inc's interest coverage ratio has shown a declining trend over the past few years, indicating a potentially concerning situation regarding the company's ability to cover its interest expenses.
In March 2020, the interest coverage ratio stood at 8.15, suggesting that the company generated 8.15 times the earnings needed to cover its interest payments. However, this ratio improved gradually throughout 2020 and early 2021, reaching a peak of 14.67 in March 2021.
From September 2021 onwards, the interest coverage ratio started to deteriorate significantly, dropping to 5.95 by the end of December 2023. This downward trend continued into 2024 with slight fluctuations but staying below levels seen in previous years.
The declining interest coverage ratio may raise concerns among investors and creditors as it indicates a reduced ability for Quanta Services Inc to meet its interest obligations using its operating income. This could potentially signify increased financial risk and may require closer monitoring to ensure the company's financial health and stability.
Peer comparison
Dec 31, 2024