Why did STRL's Q3 2024 EPS fall short of forecasts?

Sterling Infrastructure's (STRL) Q3 2024 EPS fell short of forecasts due to lower-than-expected revenues, despite strong profitability indicators and strategic initiatives supporting long-term growth: 1. **Revenue Shortfall**: Sterling reported sales below analyst estimates, missing the mark by 2.3% with revenues amounting to $593.7 million. This shortfall, despite a 6% year-over-year increase, contributed to the EPS falling short of forecasts. 2. **Margin Pressure**: The company's gross margin improved to 21.9% in Q3 2024, up from 16.4% in the same period of 2023. However, general and administrative expenses rose to $30.7 million, or 5.2% of revenue, compared to $25.2 million, or 4.5% of revenue, in Q3 2023. This increase in expenses likely impacted the net income, thereby affecting the EPS. 3. **Strategic Investments**: Sterling has been investing strategically to drive growth, including accretive buyouts and investments for operational efficiency. While these moves are crucial for long-term expansion, they can temporarily strain financial metrics such as EPS. In summary, Sterling's Q3 2024 EPS fell short due to a combination of lower-than-expected revenues, increased expenses, and strategic investments that temporarily impacted profitability. Despite these challenges, the company's profitability indicators and strategic initiatives suggest a positive outlook for future performance.