Why Is Service Corp. (SCI) Up 3.4% Since Last Earnings Report?

Core Viewpoint - Service Corp. (SCI) has shown a positive performance with a 3.4% increase in shares since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this trend leading up to the next earnings release [1] Financial Performance - Service Corp. reported second-quarter 2025 adjusted earnings of 88 cents per share, exceeding the Zacks Consensus Estimate of 84 cents and up from 79 cents in the same quarter last year [2] - Total revenues reached $1,065.4 million, a 2.9% increase from $1,034 million in the prior year, surpassing the Zacks Consensus Estimate of $1,050 million [3] Profitability Metrics - Gross profit increased by 5% to $271.4 million from $257.9 million year over year, with gross margin expanding by 60 basis points to 25.5% [4] - Operating income rose 1.7% to $224.5 million, while operating margin contracted by 30 basis points to 21.1% [4] Segment Performance - Funeral Operations: Total funeral revenues were $591.4 million, exceeding the consensus estimate of $579 million, with gross profit up 15.5% to $116 million [5] - Cemetery Operations: Total cemetery revenues reached $474.4 million, surpassing the consensus estimate of $471 million, although gross profit decreased to $155.5 million from $157.5 million [6] Financial Health - The company ended the quarter with cash and cash equivalents of $255.4 million, long-term debt of $4.98 billion, and total equity of $1.56 billion [7] Future Guidance - For 2025, adjusted earnings per share are projected to be between $3.70 and $4.00, aligning with the company's long-term growth framework of 8% to 12% [8] - Net cash provided by operating activities is expected to be between $1,025 million and $1,085 million, with total capital expenditure forecasted at $315 million [9][10] Market Sentiment - There has been a flat trend in estimates revision over the past month, indicating stable market expectations [11] - Service Corp. holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [13]