What factors drove PWR's 2024 EPS surprises?

Quanta Services Inc. (PWR) experienced a positive EPS surprise in 2024, with an EPS of $1.72, marking a year-over-year growth of 21.99%. Several key factors contributed to this positive performance: 1. **Organic Growth and Strategic Acquisitions**: Quanta's revenue base has grown consistently over the past five years at a compound annual growth rate (CAGR) of 14%, supported by an average annual organic growth rate of 7% and strategic acquisitions. This organic growth reflects strong demand for electric power infrastructure solutions, driven by secular trends. 2. **Operating Leverage and Productivity Gains**: The company's operating leverage and improved productivity have contributed to consistent margin improvement. This efficiency enhancement has bolstered Quanta's financial performance and cash flow generation. 3. **Emergency Restoration Work**: Quanta's involvement in emergency restoration work has been a significant contributor to its revenue and profitability. This work often provides additional income streams and helps maintain strong cash flows. 4. **Sector Position and Market Trends**: Quanta's leading market position in the energy sector, coupled with strong execution, has positioned it well to benefit from increasing electricity demand. Regional Transmission Organizations (RTOs) forecast a significant growth rate for electricity demand, which aligns with Quanta's growth trajectory. 5. **Financial Performance and Credit Ratings**: Quanta's strong financial performance and credit ratings upgrade to 'BBB' reflect its ability to generate robust cash flows and maintain stable credit protection metrics. This financial strength supports its business operations and capital investment plans. In summary, Quanta Services' 2024 EPS surprise can be attributed to its strategic growth initiatives, operational efficiency, and favorable market conditions in the energy sector. These factors collectively contributed to the company's strong financial performance and positive earnings surprise.