Service Corporation International (SCI) Q2 2024 earnings summary

Executive summary

• Adjusted EPS for Q2 2024 was $0.79, down from $0.83 in Q2 2023, mainly due to lower funeral profits and higher interest expense, partially offset by higher cemetery profits and lower share count.

• Net income attributable to common stockholders for Q2 2024 was $118.2 million ($0.81 per diluted share), down from $132.2 million ($0.86 per share) in Q2 2023.

• Q2 2024 revenue was $1.03 billion, up 2% year-over-year, with cemetery growth offsetting flat funeral revenue.

• Operating cash flow for the first six months of 2024 was $417.0 million, up from $363.6 million in the prior year period.

• SCI operated 1,490 funeral service locations and 492 cemeteries as of June 30, 2024, with a $15.4 billion backlog of future revenue from preneed sales.

Financial highlights

• Q2 2024 revenue: $1.03 billion (Q2 2023: $1.01 billion); six months ended June 30, 2024: $2.08 billion (2023: $2.04 billion).

• Q2 2024 net income: $118.2 million (Q2 2023: $132.2 million); six months: $249.5 million (2023: $277.2 million).

• Q2 2024 operating income: $220.8 million (Q2 2023: $233.5 million).

• Free cash flow for Q2 2024 was $133.0 million, up from $67.1 million in Q2 2023.

• Adjusted net cash provided by operating activities (excluding special items) for Q2 2024 was $219.9 million, up from $157.4 million in Q2 2023.

Outlook and guidance

• 2024 adjusted EPS guidance is $3.50–$3.80, with expectations at the lower end due to fewer funeral services performed.

• Adjusted operating cash flow guidance midpoint reiterated at $930–$960 million for 2024.

• Capital expenditures for 2024 expected at $325 million, with $125 million for field locations, $165 million for cemetery development, and $35 million for digital/corporate investments.

• 2025 EPS growth expected at the higher end of the historical 8%-12% range as headwinds subside and new insurance agreement benefits materialize.

• Guidance excludes impacts from weather events, asset divestitures, early debt extinguishment, and certain legal or tax items.