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Strategies & Market Trends : Value Investing

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To: Iron Mick who wrote (72308)	2/7/2023 9:37:01 PM
From: E_K_S	Read Replies (1) of 78688

Re: LUMN I believe they also wrote off some Goodwill which may have been from their Legacy Services which was eliminated/sold. I have not looked at their FCF after all of these one time expenses. Generally these one time write downs will impact FCF so a drop in FCF may/could just be for this quarter. Depreciation expenses do not affect free cash flow but does impact net earnings. Maybe we see one more quarter of a few more write downs (especially goodwill and/or restructure expenses). It's the FCF that is the engine that will drive EPS especially if they can grow that over then next 24 months. As they use that extra FCF to buy back shares (remember they issued a lot of shares for their various acquisitions over the last 10 years), EPS will move higher. Eventually you should see some type of PE expansion to reflect (1) lower share count , (2) reduced debt and (3) at some point growing FCF. Debt is still quite high, so that needs to be paid down too from the FCF.

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