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Service Corporation (SCI) Q3 Earnings Beat, Sales Rise Y/Y
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Service Corporation International (SCI - Free Report) posted third-quarter 2023 results, with the top and the bottom line beating the Zacks Consensus Estimate. Total revenues and earnings increased year over year. Management reaffirmed its 2023 guidance range.
Q3 in Detail
Service Corporation posted adjusted earnings of 78 cents per share, surpassing the Zacks Consensus Estimate of 70 cents. The metric increased from 68 cents reported in the year-ago quarter. The upside was driven by increased cemetery revenue coupled with reduced fixed costs. A decline in corporate general and administrative expenses and reduced share count were upsides. However, a rise in interest expenses was a concern.
Total revenues of $1,001.9 million increased from $977.7 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $978.6 million.
Service Corporation International Price and EPS Surprise
The gross profit increased to $253.7 million from almost $231 million reported in the year-ago quarter. The upside can mainly be attributed to increased recognized cemetery preneed revenue. We expected gross profit to come in at $234.5 million.
Corporate general and administrative costs were $33.2 million compared with $41.9 million in the year-ago period. The reduced cost was caused by reduced incentive compensation expenses.
The operating income of $223 million increased from $203.4 million reported in the year-ago quarter. We expected operating income to come in at $203 million.
Segment Discussion
Consolidated funeral revenues came in at $554.8 million compared with $554 million reported in the year-ago quarter. We expected funeral revenues to come in at $545.6 million.
Total comparable funeral revenues fell 1.3%, mainly due to a fall in core funeral revenues. Core funeral revenues fell 2.2% thanks to a decline in core funeral services performed to the tune of 6.2%. This was somewhat countered by growth in the core average revenue per service of 4.3%.
Comparable preneed funeral sales production grew 4.9%. Further, core preneed sales production grew increased by 1.2%, driven by increased sales averages. Non-funeral home preneed sales production jumped 18.0%. The upside can be attributed to increased sales averages and higher velocity.
Comparable funeral gross profit came in at $108.5 million, up $5.8 million. The gross profit margin expanded 130 basis points (bps) to 19.9%, mainly on reduced fixed costs and lower incentive compensation costs.
Consolidated cemetery revenues came in at $447.1 million, up from $423.8 million reported in the year-ago quarter. We expected cemetery revenues to come in at $437.1 million. Comparable cemetery revenues increased 5.2%. The upside was mainly caused by increased core revenues to the tune of $21.4.
Comparable preneed cemetery sales production fell 5.9%. The company witnessed lower core production with continued moderation in consumer discretionary spending.
Comparable cemetery gross profit came in at $144.3 million, up $15 million. The gross profit margin expanded 190 bps to 32.4%.
Other Financial Details
Service Corporation ended the quarter with cash and cash equivalents of $172.7 million, long-term debt of $4,511.5 million and total equity of $1,630.7 million.
Net cash from operating activities amounted to $591.5 million during the nine months ended Sep 30, 2023. During the same period, the company incurred capital expenditures of $267.8 million.
Image Source: Zacks Investment Research
2023 Guidance
Service Corporation continues to expect 2023 adjusted earnings per share (EPS) in the range of $3.40- $3.60. We note that the company’s earnings came in at $3.80 per share in 2022.
Net cash provided by operating activities (excluding special items and cash taxes) is still anticipated in the range of $920-$960 million. Net cash provided by operating activities (excluding special items) is expected in the range of $830-$880 million.
Management continues to expect maintenance capital expenditures in the band of $290-$310 million.
Shares of this Zacks Rank #4 (Sell) company have declined 17.2% in the past three months compared with the industry’s 17.3% decline.
The Zacks Consensus Estimate for Inter Parfums’ current financial year sales indicates 20.6% growth from the year-ago reported figure. IPAR has a trailing four-quarter earnings surprise of 45.9% on average.
e.l.f. Beauty (ELF - Free Report) sports a Zacks Rank #1. ELF has a trailing four-quarter earnings surprise of 108.3% on average.
The Zacks Consensus Estimate for e.l.f. Beauty’s current financial year sales and earnings suggest growth of 46.2% and 48.8%, respectively, from the year-ago reported numbers.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2 (Buy). CELH delivered an earnings surprise of 100% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal year sales and earnings suggests growth of 89.9% and 170.3%, respectively, from the year-ago reported numbers.
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Service Corporation (SCI) Q3 Earnings Beat, Sales Rise Y/Y
Service Corporation International (SCI - Free Report) posted third-quarter 2023 results, with the top and the bottom line beating the Zacks Consensus Estimate. Total revenues and earnings increased year over year. Management reaffirmed its 2023 guidance range.
Q3 in Detail
Service Corporation posted adjusted earnings of 78 cents per share, surpassing the Zacks Consensus Estimate of 70 cents. The metric increased from 68 cents reported in the year-ago quarter. The upside was driven by increased cemetery revenue coupled with reduced fixed costs. A decline in corporate general and administrative expenses and reduced share count were upsides. However, a rise in interest expenses was a concern.
Total revenues of $1,001.9 million increased from $977.7 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $978.6 million.
Service Corporation International Price and EPS Surprise
Service Corporation International price-eps-surprise | Service Corporation International Quote
The gross profit increased to $253.7 million from almost $231 million reported in the year-ago quarter. The upside can mainly be attributed to increased recognized cemetery preneed revenue. We expected gross profit to come in at $234.5 million.
Corporate general and administrative costs were $33.2 million compared with $41.9 million in the year-ago period. The reduced cost was caused by reduced incentive compensation expenses.
The operating income of $223 million increased from $203.4 million reported in the year-ago quarter. We expected operating income to come in at $203 million.
Segment Discussion
Consolidated funeral revenues came in at $554.8 million compared with $554 million reported in the year-ago quarter. We expected funeral revenues to come in at $545.6 million.
Total comparable funeral revenues fell 1.3%, mainly due to a fall in core funeral revenues. Core funeral revenues fell 2.2% thanks to a decline in core funeral services performed to the tune of 6.2%. This was somewhat countered by growth in the core average revenue per service of 4.3%.
Comparable preneed funeral sales production grew 4.9%. Further, core preneed sales production grew increased by 1.2%, driven by increased sales averages. Non-funeral home preneed sales production jumped 18.0%. The upside can be attributed to increased sales averages and higher velocity.
Comparable funeral gross profit came in at $108.5 million, up $5.8 million. The gross profit margin expanded 130 basis points (bps) to 19.9%, mainly on reduced fixed costs and lower incentive compensation costs.
Consolidated cemetery revenues came in at $447.1 million, up from $423.8 million reported in the year-ago quarter. We expected cemetery revenues to come in at $437.1 million. Comparable cemetery revenues increased 5.2%. The upside was mainly caused by increased core revenues to the tune of $21.4.
Comparable preneed cemetery sales production fell 5.9%. The company witnessed lower core production with continued moderation in consumer discretionary spending.
Comparable cemetery gross profit came in at $144.3 million, up $15 million. The gross profit margin expanded 190 bps to 32.4%.
Other Financial Details
Service Corporation ended the quarter with cash and cash equivalents of $172.7 million, long-term debt of $4,511.5 million and total equity of $1,630.7 million.
Net cash from operating activities amounted to $591.5 million during the nine months ended Sep 30, 2023. During the same period, the company incurred capital expenditures of $267.8 million.
Image Source: Zacks Investment Research
2023 Guidance
Service Corporation continues to expect 2023 adjusted earnings per share (EPS) in the range of $3.40- $3.60. We note that the company’s earnings came in at $3.80 per share in 2022.
Net cash provided by operating activities (excluding special items and cash taxes) is still anticipated in the range of $920-$960 million. Net cash provided by operating activities (excluding special items) is expected in the range of $830-$880 million.
Management continues to expect maintenance capital expenditures in the band of $290-$310 million.
Shares of this Zacks Rank #4 (Sell) company have declined 17.2% in the past three months compared with the industry’s 17.3% decline.
Solid Staple Stocks
Inter Parfums (IPAR - Free Report) , which manufactures, markets and distributes a range of fragrances and fragrance-related products, currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Inter Parfums’ current financial year sales indicates 20.6% growth from the year-ago reported figure. IPAR has a trailing four-quarter earnings surprise of 45.9% on average.
e.l.f. Beauty (ELF - Free Report) sports a Zacks Rank #1. ELF has a trailing four-quarter earnings surprise of 108.3% on average.
The Zacks Consensus Estimate for e.l.f. Beauty’s current financial year sales and earnings suggest growth of 46.2% and 48.8%, respectively, from the year-ago reported numbers.
Celsius Holdings (CELH - Free Report) , which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2 (Buy). CELH delivered an earnings surprise of 100% in the last reported quarter.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal year sales and earnings suggests growth of 89.9% and 170.3%, respectively, from the year-ago reported numbers.