How did FSS manage to boost its operating profit in Q4 2024 despite rising expenses?

Federal Signal Corporation (FSS) was able to boost its operating profit in Q4 2024 despite rising expenses due to a combination of factors: 1. **Revenue Growth**: Federal Signal has experienced a 10.3% revenue growth over the last twelve months. This increase in revenue contributes to a larger bottom line, allowing the company to absorb rising expenses while maintaining profitability. 2. **Cost Management**: The company's strong revenue growth and competitive positioning in niche markets have allowed it to manage costs effectively. Federal Signal's ability to maintain pricing power in its strong market positions is a key factor in controlling expenses. 3. **Strategic Initiatives**: Federal Signal's ongoing mergers and acquisitions strategy is expected to enhance profitability. By integrating acquired businesses and expanding its aftermarket presence, the company can increase efficiency and reduce costs over time. 4. **Financial Strength**: The company's impressive 20% return on equity and robust cash flows provide a solid foundation for managing expenses and investing in growth opportunities that can further enhance profitability. In summary, Federal Signal's ability to boost its operating profit in Q4 2024 can be attributed to its strategic revenue growth, effective cost management, strategic initiatives, and strong financial position. These factors collectively enable the company to maintain profitability even in the face of rising expenses.