Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Cash conversion improved markedly this quarter, with free cash flow margin expanding versus both the prior quarter and the year-ago period. Operating cash flow rose sharply, more than offsetting a moderate increase in capital spending, as the company operates through its Aerospace, Renewable Energy, and Power segments.
- Operating cash flow increased significantly relative to revenue, driving free cash flow higher and lifting the free cash flow margin. Capital expenditures were moderately higher than the prior quarter but lower than a year ago.
- Compared to the immediately preceding quarter, revenue was modestly lower but operating cash flow and free cash flow were substantially higher. Versus the same quarter one year earlier, revenue was considerably lower, yet free cash flow improved as operating cash flow growth outpaced a decline in capital outlays.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$5.8B
Trailing twelve-month free cash flow.
Quarter free cash flow
$1.6B
Free cash flow in the selected fiscal quarter.
Operating cash flow
$1.8B
Cash generated by operations before capital spending.
CapEx
$222.0M
Capital spending and related asset purchases.
FCF margin
17.2%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-12-31 | $16.0B | $4.5B | $139.0M | $4.4B | 27.2% |
| 2023-03-31 | $7.0B | -$259.0M | $298.0M | -$557.0M | -7.9% |
| 2023-06-30 | $9.5B | $485.0M | $92.0M | $393.0M | 4.1% |
| 2023-09-30 | $9.3B | $1.8B | $222.0M | $1.6B | 17.2% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 453.5% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 2.4% | Lower capital intensity usually supports FCF margin. |
| Net cash | n/a | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Strong Operating Cash Flow
Operating cash flow rose substantially from both the prior quarter and the same quarter last year, providing the primary lift to free cash flow. The increase occurred even as revenue decreased year over year.
Higher operating cash flow directly improved free cash flow and margin, demonstrating stronger cash conversion efficiency.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Operating cash flow increased significantly relative to revenue, driving free cash flow higher and lifting the free cash flow margin. Capital expenditures were moderately higher than the prior quarter but lower than a year ago.
Compared to the immediately preceding quarter, revenue was modestly lower but operating cash flow and free cash flow were substantially higher. Versus the same quarter one year earlier, revenue was considerably lower, yet free cash flow improved as operating cash flow growth outpaced a decline in capital outlays.
Monitor revenue trends, as they declined year over year despite the improvement in cash generation.