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What's in Store for Service Corporation's (SCI) Q3 Earnings?

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Service Corporation International (SCI - Free Report) is likely to report an increase in the top and bottom lines when it reports third-quarter 2020 numbers. The Zacks Consensus Estimate for earnings has moved up 4.9% in the past seven days to 43 cents per share. Further, it suggests an increase of 16.2% from the figure reported in the prior-year period. Additionally, Service Corporation’s bottom line outperformed the consensus mark by a wide margin in the last reported quarter.

The Zacks Consensus Estimate for revenues is pegged at $801 million, indicating an increase of 4.1% from the prior-year quarter’s reported figure.

Key Factors to Note

Service Corporation has been gaining on increased funerals performed due to the coronavirus-led deaths. Also, the company’s strong cost management has been aiding performance. In the last reported quarter, the bottom line was backed by increased gross profit stemming from greater funeral services performed in the core funeral services business on account of the pandemic, along with solid cost management. In its last earnings call, management said that it expects higher funeral services performed due to continued effects of the pandemic, especially in the early third quarter.

However, preneed sales have been soft due to increased stay-at-home and social-distancing orders. Also, the company has been seeing a decline in funeral average per case due to bans on big gatherings. In the last earnings call, the company notified that though it expects to perform increased funeral services amid the pandemic, it anticipates headwinds from lower average revenue per service (stemming from curbs on gatherings and self-quarantine measures in certain jurisdictions). Apart from this, the company has been seeing escalated costs associated with COVID-19.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Service Corporation this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Service Corporation currently has a Zacks Rank #2 and an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.

Nu Skin (NUS - Free Report) has an Earnings ESP of +3.54% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Newell Brands (NWL - Free Report) has an Earnings ESP of +0.33% and a Zacks Rank #2.

Church & Dwight (CHD - Free Report) has an Earnings ESP of +1.56% and a Zacks Rank #3.

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