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What's in Store for Service Corporation's (SCI) Q1 Earnings?

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Service Corporation International (SCI - Free Report) is scheduled to release first-quarter 2020 results on Apr 30. The funeral services company’s earnings came in line with the Zacks Consensus Estimate in the last reported quarter. Notably, the company delivered a positive earnings surprise of 3%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for first-quarter earnings is pegged at 45 cents per share, which suggests a decrease of 4.3% from the figure reported in the year-ago quarter. The consensus mark has dropped 8.2% in the past 30 days. The consensus mark for revenues stands at $793 million, indicating a dip of 0.7% from the year-ago period’s reported figure.

Key Factors to Note

Although coronavirus has resulted in increased deaths in the United States, it is not good news for the funeral service companies. Incidentally, media reports suggest that funeral homes and mortuaries have been reducing contact with customers to stay safe and contain the growing spread of COVID-19. In fact, funerals have also been banned in some places, posing threats to the funeral homes business of companies like Service Corporation.

Apart from this, Service Corporation has been grappling with higher costs. In its last earnings call, management said that it expects a slight increase in expenses in 2020 due to cemetery inventory development and the construction of funeral homes. Further, a rise in the number of cremations as another option to the traditional funeral service is a concern. This is because the company’s average revenues from cremations with services are usually lower compared to that for traditional burials. Nonetheless, growth-oriented investments like buyouts and building of new cemeteries and funeral homes bode well.

What the Zacks Model Unveils

Our proven model does not 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. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Service Corporation carries a Zacks Rank #4 (Sell) 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.

Hain Celestial (HAIN - Free Report) has an Earnings ESP of +9.24% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Church & Dwight (CHD - Free Report) currently has an Earnings ESP of +3.56% and a Zacks Rank #2.

Kellogg (K - Free Report) currently has an Earnings ESP of +3.23% and a Zacks Rank of 2.

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