In This Article:
Service Corporation International SCI posted solid fourth-quarter 2024 results, wherein the top and bottom lines increased year over year and beat the Zacks Consensus Estimate.
The company concluded 2024 on a strong note, with fourth-quarter bottom-line growth being driven by revenue gains across both segments. Higher cemetery preneed sales production and increased funeral general agency revenues compensated for lower services performed during the fourth quarter. For 2025, management expects to deliver robust results, with the midpoint of its projected adjusted earnings per share growth aligning with its long-term target range of 8%-12%.
SCI’s Quarterly Performance: Key Insights
SCI posted adjusted earnings of $1.06 per share, which came a penny ahead of the Zacks Consensus Estimate of $1.05 while increasing 14% from 93 cents reported in the year-ago period. The upside was driven by greater gross profit, reduced corporate general and administrative expenses and reduced share count, partly countered by the elevated tax rate.
Service Corporation International Price, Consensus and EPS Surprise
Service Corporation International price-consensus-eps-surprise-chart | Service Corporation International Quote
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Total revenues of $1,093 million increased from $1,055 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $1,085 million.
The gross profit was $305.9 million compared with $287.6 million reported in the year-ago quarter. Corporate general and administrative costs were $15 million, lower than the year-ago period’s figure of $45.1 million.
The operating income of $262.2 million increased from $242.1 million reported in the year-ago quarter.
Decoding SCI’s Segment-Wise Results
Consolidated Funeral revenues came in at $587.7 million in the quarter compared with $573.2 million reported in the year-ago period. Total comparable funeral revenues rose 1%. The upside was backed by an increase in core general agency and other revenues. This was somewhat negated by a drop in core funeral revenues and non-funeral home preneed sales revenues.
Core funeral revenues fell 1.8% due to lower core funeral services performed, somewhat made up by higher core average revenue per service. The core cremation rate rose by 100 basis points (bps) to 57.5%.
Non-funeral home preneed sales revenues dropped by 25% due to a fall in non-funeral home preneed sales production. Comparable preneed funeral sales production tumbled 9.2%. Core preneed sales production fell 6.2% due to a shift to a new preneed insurance provider. Non-funeral home preneed sales production declined 19.7% because of a shift from trust to insurance-funded contracts.
Comparable funeral gross profit came in at $125.9 million, up $3.6 million. The gross profit expanded 40 bps to 21.9%.
Consolidated Cemetery revenues came in at $505.3 million compared with $482.6 million reported in the year-ago quarter. Total comparable cemetery revenues jumped 4.2% year over year on increased core revenues. Core revenue growth stemmed from higher total recognized preneed revenues, elevated recognized preneed property revenues, and increased recognized preneed merchandise and service revenues.
Comparable preneed cemetery sales production rose 2%, driven by strong large sales activity. Core preneed cemetery sales production was nearly flat year over year.
Comparable cemetery gross profit came in at $179.6 million, up by $14.1 million. The gross profit margin expanded by 150 bps to 35.8%.