Service Corp Q1 Earnings Beat Estimates, Funeral Revenues Rise

Core Insights - Service Corporation International (SCI) reported strong first-quarter 2025 results, with both revenue and earnings exceeding expectations, indicating robust performance in the funeral segment [1][2]. Financial Performance - Adjusted earnings per share were 96 cents, surpassing the Zacks Consensus Estimate of 90 cents, and increased from 89 cents in the prior year, reflecting a 7.9% year-over-year growth [2]. - Total revenues reached $1,074.2 million, a 2.8% increase from $1,045.4 million in the same quarter last year, also beating the consensus estimate of $1,054 million [2]. - Gross profit rose 6.3% to $291.4 million, with gross margin expanding by 90 basis points to 27.1% [3]. Segment Performance - Funeral Operations: Total funeral revenues were $639.5 million, exceeding the consensus estimate of $607.3 million, and up from $604.7 million in Q1 2024. Gross profit in this segment increased 16.8% to $154 million, with gross margin improving by 230 basis points to 24.1% [5]. - Cemetery Operations: Total cemetery revenues were $434.7 million, slightly below the consensus estimate of $446.4 million, and down from $440.6 million in the previous year. Gross profit decreased 3.4% to $137.4 million, with gross margin declining by 70 basis points to 31.6% [10]. Operational Metrics - The number of funeral services performed increased to 97,854 from 94,366 in the prior year, with average revenues per service rising to $5,748 from $5,608 [5]. - Comparable funeral services performed grew 1.8% to 95,624, while comparable cemetery results showed core revenues decreased 2.5% to $397.7 million [7][11]. Financial Health - As of the end of the quarter, the company had cash and cash equivalents of $227.2 million, long-term debt of $4.74 billion, and total equity of $1.65 billion [13]. - Net cash provided by operating activities was $311.1 million, with total capital expenditure amounting to $78.2 million [14]. Guidance - For 2025, SCI maintains its guidance for adjusted earnings per share at $3.70-$4.00, aligning with its long-term growth framework of 8% to 12% [15]. - Total capital expenditure for 2025 is projected at $315 million, with allocations for capital improvements, cemetery property development, and digital investments [17].