Service Corporation International (SCI) Q3 2024 earnings summary

Executive summary

• Q3 2024 adjusted EPS was $0.79, up from $0.78 year-over-year, with diluted EPS at $0.81 and net income of $117.8M, down from $122.0M; revenue rose to $1.014B.

• Adjusted operating cash flow reached $269M, up 18% year-over-year, and net cash from operating activities was $263.8M.

• Acquisition activity was robust, with $123M invested in 10 funeral homes and 2 cemeteries, plus $31M in real estate for expansion.

• Operating results were impacted by higher interest expense and G&A costs, partially offset by a lower tax rate and share count.

• Funeral and cemetery gross profit remained stable, with modest revenue growth and cost management focus.

Financial highlights

• Comparable funeral revenues rose $7M (1%) year-over-year, with average revenue per service up 2.1% despite a 1% decline in volume.

• Funeral gross profit declined by $2M, margin down 50 bps to just over 19%.

• Comparable cemetery revenue was flat, with gross profit up $1M and margin up to 32.4%.

• Operating income was $212.4M, down from $223.0M year-over-year; gross profit for Q3 was $252.6M, nearly flat year-over-year.

• Free cash flow for Q3 2024 was $180.6M, up from $146.0M in Q3 2023.

Outlook and guidance

• Q4 2024 adjusted EPS guidance is $1.00–$1.10, up 8–18% from $0.93 in Q4 2023.

• Full-year 2024 adjusted EPS expected at $3.47–$3.57; midpoint of adjusted operating cash flow guidance raised to $950M.

• 2025 EPS growth targeted at the higher end of 8%–12% historical range, with funeral volumes stabilizing and pre-need cemetery sales returning to low- to mid-single-digit growth.

• Maintenance capital expenditures for 2024 expected at $325M; 2025 maintenance capital to remain generally flat.

• 2025 cash taxes expected to increase by $150M as tax benefits normalize.