EchoStar Corporation (SATS)
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 | 406,052 | -2,208,010 | -2,083,814 | -1,864,151 | -1,793,755 | 235,574 | 268,310 | 248,646 | 238,762 | 205,597 | 215,296 | 211,987 | 199,683 | 197,480 | 170,820 | 155,864 | 147,068 | 166,604 | 147,518 | 151,891 |
| Interest expense (ttm) | US$ in thousands | 481,622 | 313,258 | 244,405 | 176,479 | 90,357 | 53,221 | 54,416 | 55,483 | 57,170 | 58,789 | 61,257 | 75,818 | 95,512 | 115,317 | 136,971 | 146,361 | 147,927 | 206,661 | 218,559 | 240,464 |
| Interest coverage | 0.84 | -7.05 | -8.53 | -10.56 | -19.85 | 4.43 | 4.93 | 4.48 | 4.18 | 3.50 | 3.51 | 2.80 | 2.09 | 1.71 | 1.25 | 1.06 | 0.99 | 0.81 | 0.67 | 0.63 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $406,052K ÷ $481,622K
= 0.84
EchoStar Corporation's interest coverage ratio has shown a fluctuating trend over the past few years. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt obligations using its operating income.
From March 31, 2020, to June 30, 2021, the interest coverage ratio improved gradually from 0.63 to 1.25, indicating an increasing ability to cover interest expenses with operating income. However, from September 30, 2021, to December 31, 2022, the ratio saw more significant improvements, reaching a high of 4.18 by the end of December 2022, suggesting a substantial enhancement in the ability to meet interest obligations.
The sharp decline in the interest coverage ratio from March 31, 2023, to June 30, 2024, where the ratio turned negative, indicating that operating income was insufficient to cover interest expenses during those periods. This negative trend raises concerns regarding the company's financial health and its ability to service its debt comfortably.
However, by the end of December 31, 2024, the interest coverage ratio had recovered and improved to 0.84, suggesting that the company's ability to cover interest expenses had been restored to a certain extent. Overall, it is crucial for EchoStar Corporation to maintain a healthy interest coverage ratio to ensure financial stability and meet its debt obligations effectively.
Peer comparison
Dec 31, 2024