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Service Corporation Q1 Earnings Miss on Lower Funeral Volumes
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Key Takeaways
SCI Q1 EPS missed estimates, while revenues rose 2.1% to $1,096.5M.
SCI funeral services fell to 93,686; gross margin dropped to 21.2% despite higher pricing.
SCI cemetery revenues grew to $465.9M; preneed sales production rose 10%, and cash flow hit $334.5M.
Service Corporation International (SCI - Free Report) posted results for the first quarter of 2026, wherein earnings missed estimates as funeral volumes normalized from an unusually strong prior-year flu season, partly offset by resilient pricing, disciplined cost control and solid cemetery preneed momentum.
The company’s adjusted earnings of 97 cents per share rose 1% year over year while missing the Zacks Consensus Estimate of $1.00. Revenues increased 2.1% year over year to $1,096.5 million and beat the consensus mark of $1,088 million. Comparable cemetery preneed sales production rose 10% in the quarter, helping offset softer funeral volumes.
SCI generated operating income of $243.8 million in the first quarter of 2026, down from $251.7 million a year ago.
Service Corporation International Price, Consensus and EPS Surprise
The Zacks Rank #4 (Sell) company’s funeral segment faced a volume-driven headwind in the quarter. Total funeral revenues were $630.6 million versus $639.5 million in the first quarter of 2025, reflecting lower activity across core and non-funeral home channels.
Profitability in the segment also softened. Funeral gross profit fell to $134 million from $154 million, with gross margin contracting to 21.2% from 24.1%. Funeral services performed declined to 93,686 from 97,854, though average revenue per service increased to $5,919 from $5,748.
Comparable funeral revenues decreased to $620.2 million from $637.6 million, as core volumes moved lower. Comparable gross profit declined to $132.6 million from $155.4 million, and the comparable gross margin compressed to 21.4% from 24.4%, highlighting the impact of lower revenues across a high fixed-cost structure.
Service trends were mixed across categories. Comparable atneed services performed were 47,978 compared with 52,187 a year ago, while matured preneed services were 28,509 versus 29,724. Even with fewer services, total comparable average revenue per service rose to $5,947 from $5,754, and the core cremation rate edged up to 57.8% from 57.4%.
SCI’s Cemetery Segment Delivers Strong Growth
Service Corporation’s cemetery segment was the quarter’s clear bright spot. Cemetery revenues increased to $465.9 million from $434.7 million in the year-ago quarter, supported by higher recognized preneed property revenues of $209.6 million versus $188.7 million, and higher recognized preneed merchandise and service revenues of $106.3 million versus $98.5 million.
Margin performance improved alongside growth. Cemetery gross profit rose to $152.5 million from $137.4 million, and gross margin expanded to 32.7% from 31.6%, reflecting favorable operating leverage as recognized preneed activity increased.
Comparable cemetery revenues rose to $465.5 million from $434.7 million, driven by higher core revenues of $424.7 million versus $399.5 million and higher other revenue of $40.8 million versus $35.2 million. Comparable gross profit grew to $152.5 million from $137.5 million, and the comparable gross profit percentage improved to 32.8% from 31.6%.
Comparable cemetery preneed sales production increased to $356.2 million from $324.6 million, while total preneed and atneed sales production rose to $466.5 million from $437.8 million. The recognition rate was 91% compared with 91.3% in the prior-year quarter.
SCI’s 2026 View Reaffirmed, Cash Flow Improves
Service Corporation’s adjusted operating cash flow increased to $334.5 million for the first quarter, driven by favorable working capital movements. Total capital expenditures were $79.9 million compared with $78.2 million a year ago, reflecting continued investment in field locations, cemetery development and growth projects.
SCI ended the quarter with cash and cash equivalents of roughly $258 million, while long-term debt was nearly $5.11 billion.
Management reaffirmed 2026 guidance for diluted earnings per share excluding special items of $4.05-$4.35 and net cash provided by operating activities excluding special items of $1.005-$1.065 billion, with maintenance capital expenditures expected to total $325 million.
Shares of SCI have risen 10.8% year to date, in line with the industry.
The Zacks Consensus Estimate for Smithfield Foods’ current financial-year sales and earnings indicates growth of 1.3% and 7.5%, respectively, from the prior-year reported levels. SFD delivered a trailing four-quarter earnings surprise of 12%, on average.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company through the Beef, Pork, Chicken and Prepared Foods segments. TSN currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales calls for growth of 4.4%, while the consensus mark for earnings indicates a decline of 4.1% from the year-ago figures. TSN delivered a trailing four-quarter earnings surprise of 16.5%, on average.
Post Holdings (POST - Free Report) operates as a consumer-packaged goods holding company. At present, POST carries a Zacks Rank of 2. Post Holdings delivered a trailing four-quarter earnings surprise of 19.6%, on average.
The consensus estimate for Post Holdings’ current fiscal-year sales and earnings implies growth of 2.7% and 0.1%, respectively, from the year-ago figures.
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Service Corporation Q1 Earnings Miss on Lower Funeral Volumes
Key Takeaways
Service Corporation International (SCI - Free Report) posted results for the first quarter of 2026, wherein earnings missed estimates as funeral volumes normalized from an unusually strong prior-year flu season, partly offset by resilient pricing, disciplined cost control and solid cemetery preneed momentum.
The company’s adjusted earnings of 97 cents per share rose 1% year over year while missing the Zacks Consensus Estimate of $1.00. Revenues increased 2.1% year over year to $1,096.5 million and beat the consensus mark of $1,088 million. Comparable cemetery preneed sales production rose 10% in the quarter, helping offset softer funeral volumes.
SCI generated operating income of $243.8 million in the first quarter of 2026, down from $251.7 million a year ago.
Service Corporation International Price, Consensus and EPS Surprise
Service Corporation International price-consensus-eps-surprise-chart | Service Corporation International Quote
SCI’s Funeral Results Weaken on Volume Declines
The Zacks Rank #4 (Sell) company’s funeral segment faced a volume-driven headwind in the quarter. Total funeral revenues were $630.6 million versus $639.5 million in the first quarter of 2025, reflecting lower activity across core and non-funeral home channels.
Profitability in the segment also softened. Funeral gross profit fell to $134 million from $154 million, with gross margin contracting to 21.2% from 24.1%. Funeral services performed declined to 93,686 from 97,854, though average revenue per service increased to $5,919 from $5,748.
Comparable funeral revenues decreased to $620.2 million from $637.6 million, as core volumes moved lower. Comparable gross profit declined to $132.6 million from $155.4 million, and the comparable gross margin compressed to 21.4% from 24.4%, highlighting the impact of lower revenues across a high fixed-cost structure.
Service trends were mixed across categories. Comparable atneed services performed were 47,978 compared with 52,187 a year ago, while matured preneed services were 28,509 versus 29,724. Even with fewer services, total comparable average revenue per service rose to $5,947 from $5,754, and the core cremation rate edged up to 57.8% from 57.4%.
SCI’s Cemetery Segment Delivers Strong Growth
Service Corporation’s cemetery segment was the quarter’s clear bright spot. Cemetery revenues increased to $465.9 million from $434.7 million in the year-ago quarter, supported by higher recognized preneed property revenues of $209.6 million versus $188.7 million, and higher recognized preneed merchandise and service revenues of $106.3 million versus $98.5 million.
Margin performance improved alongside growth. Cemetery gross profit rose to $152.5 million from $137.4 million, and gross margin expanded to 32.7% from 31.6%, reflecting favorable operating leverage as recognized preneed activity increased.
Comparable cemetery revenues rose to $465.5 million from $434.7 million, driven by higher core revenues of $424.7 million versus $399.5 million and higher other revenue of $40.8 million versus $35.2 million. Comparable gross profit grew to $152.5 million from $137.5 million, and the comparable gross profit percentage improved to 32.8% from 31.6%.
Comparable cemetery preneed sales production increased to $356.2 million from $324.6 million, while total preneed and atneed sales production rose to $466.5 million from $437.8 million. The recognition rate was 91% compared with 91.3% in the prior-year quarter.
SCI’s 2026 View Reaffirmed, Cash Flow Improves
Service Corporation’s adjusted operating cash flow increased to $334.5 million for the first quarter, driven by favorable working capital movements. Total capital expenditures were $79.9 million compared with $78.2 million a year ago, reflecting continued investment in field locations, cemetery development and growth projects.
SCI ended the quarter with cash and cash equivalents of roughly $258 million, while long-term debt was nearly $5.11 billion.
Management reaffirmed 2026 guidance for diluted earnings per share excluding special items of $4.05-$4.35 and net cash provided by operating activities excluding special items of $1.005-$1.065 billion, with maintenance capital expenditures expected to total $325 million.
Shares of SCI have risen 10.8% year to date, in line with the industry.
Consumer Staple Stocks to Consider
Smithfield Foods, Inc. (SFD - Free Report) produces various packaged meats and fresh pork products in the United States and internationally. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Smithfield Foods’ current financial-year sales and earnings indicates growth of 1.3% and 7.5%, respectively, from the prior-year reported levels. SFD delivered a trailing four-quarter earnings surprise of 12%, on average.
Tyson Foods, Inc. (TSN - Free Report) operates as a food company through the Beef, Pork, Chicken and Prepared Foods segments. TSN currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales calls for growth of 4.4%, while the consensus mark for earnings indicates a decline of 4.1% from the year-ago figures. TSN delivered a trailing four-quarter earnings surprise of 16.5%, on average.
Post Holdings (POST - Free Report) operates as a consumer-packaged goods holding company. At present, POST carries a Zacks Rank of 2. Post Holdings delivered a trailing four-quarter earnings surprise of 19.6%, on average.
The consensus estimate for Post Holdings’ current fiscal-year sales and earnings implies growth of 2.7% and 0.1%, respectively, from the year-ago figures.