How did ZWS outperform forecasts in Q4 2024?

Zurn Elkay Water Solutions Corp (ZWS) outperformed forecasts in Q4 2024 primarily due to strong financial performance across various metrics: 1. **Earnings Per Share (EPS)**: ZWS reported an actual EPS of $0.32 for Q4 2024, which exceeded the estimate EPS of $0.28 by 14.3%. This indicates effective cost management and operational efficiency. 2. **Revenue**: The company's actual revenue for the quarter was $370.7 million, surpassing the estimated revenue of $366.64 million by 1.3%. This reflects robust sales performance, particularly in non-residential markets. 3. **Market Expansion and Product Growth**: ZWS has been expanding its product offerings and focusing on increasing the attach rate of filtered bottle fillers. This strategic focus has likely contributed to the company's revenue outperformance. 4. **Cost Management and Margin Expansion**: ZWS achieved a 9% increase in adjusted EBITDA, leading to a 150 basis points margin expansion year-over-year. This demonstrates effective cost management and operational efficiency, which has likely boosted profitability and EPS. 5. **Dividend Increase and Shareholder Returns**: ZWS raised its dividend by 12.5% to $0.09 per quarter, reflecting confidence in its financial stability and commitment to returning value to shareholders. This positive signal to investors may have attracted more shareholders, boosting stock performance. In summary, ZWS's outperformance in Q4 2024 can be attributed to strong financial performance, effective cost management, strategic market expansion, and a focus on increasing shareholder returns. These factors combined to exceed market forecasts and expectations.