Seagate Technology PLC (STX)
Interest coverage
| 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 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 777,000 | 156,000 | -303,000 | -344,000 | -183,000 | 164,000 | 897,000 | 1,434,000 | 1,928,000 | 2,138,000 | 2,122,000 | 1,889,000 | 1,568,000 | 1,221,000 | 1,210,000 | 1,251,000 | 1,233,000 | 1,370,000 | 1,253,000 | 1,323,000 |
| Interest expense (ttm) | US$ in thousands | 332,000 | 334,000 | 333,000 | 326,000 | 313,000 | 294,000 | 276,000 | 261,000 | 249,000 | 243,000 | 239,000 | 229,000 | 220,000 | 210,000 | 200,000 | 196,000 | 201,000 | 207,000 | 213,000 | 221,000 |
| Interest coverage | 2.34 | 0.47 | -0.91 | -1.06 | -0.58 | 0.56 | 3.25 | 5.49 | 7.74 | 8.80 | 8.88 | 8.25 | 7.13 | 5.81 | 6.05 | 6.38 | 6.13 | 6.62 | 5.88 | 5.99 |
June 30, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $777,000K ÷ $332,000K
= 2.34
Seagate Technology PLC's interest coverage ratio has shown fluctuations over the past several quarters. The interest coverage ratio measures the company's ability to cover 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 payments.
Looking at the data provided, we can see that Seagate's interest coverage ratio was consistently healthy from December 2021 to June 2022, ranging between 7.74 to 8.88. This indicates that the company had a comfortable cushion to cover its interest expenses during this period.
However, the interest coverage ratio dropped significantly in the subsequent quarters, reaching negative values in December 2023 and September 2023. This suggests that Seagate may have faced challenges generating enough operating income to cover its interest payments during these quarters.
It is important for investors and stakeholders to closely monitor Seagate's interest coverage ratio going forward to assess the company's ability to meet its debt obligations and manage its financial health effectively.
Peer comparison
Jun 30, 2024