Service Corporation International Q2 Earnings Call Highlights

Service Corporation International Q2 Earnings Call Highlights

Q2 adjusted EPS rose to $0.90 from $0.88 a year earlier, supported by cemetery revenue and trust-fund income despite lower funeral volumes and deferred cemetery revenue. SCI maintained its $4.20 full-year EPS midpoint and narrowed its outlook to $4.10–$4.30. Cemetery performance remained strong, with comparable revenue up 5% and preneed sales production increasing 8%. Funeral volumes declined 1.7% but showed improvement through the quarter, reaching roughly flat growth in preliminary July results. SCI raised its 2026 adjusted operating cash-flow midpoint by $50 million to $1.085 billion and expects approximately $750 million in free cash flow. The company returned $172 million to shareholders during the quarter through buybacks and dividends while ending with about $1.6 billion in liquidity.

Service Corporation International NYSE: SCI reported second-quarter 2026 earnings per share of $0.90, up from $0.88 a year earlier, as growth in cemetery revenue and trust fund income more than offset pressure from lower funeral volumes and deferred cemetery revenue. Chairman and Chief Executive Officer Tom Ryan said the company expects stronger performance in the second half, forecasting solid revenue growth and margin expansion in both funeral and cemetery operations compared with the second half of 2025. SCI confirmed the $4.20 midpoint of its full-year adjusted EPS outlook and narrowed its guidance range to $4.10 to $4.30 per share.

Comparable cemetery revenue rose $23 million, or about 5%, from the prior-year quarter. Core cemetery revenue increased $14 million, driven principally by a $15 million increase in recognized preneed revenue, including higher property revenue as well as merchandise and services revenue. Other cemetery revenue increased $8 million, primarily due to higher endowment care trust fund income. Comparable preneed cemetery sales production increased $29.7 million, or 8%, during the quarter. Core sales accounted for $24.4 million of the increase, while large sales added $5.3 million. Ryan said SCI’s sales strategy centers on expanding sales counselor headcount, improving lead effectiveness, increasing preneed seminars and growing large sales.

Cemetery gross profit increased $7 million, or 4%, while the margin remained roughly flat at 33%. Ryan said selling compensation weighed on current margins because compensation is recognized as incurred while a significant portion of the related preneed revenue is deferred. The company expects revenue coming out of backlog in future periods to carry lower associated selling compensation expense and higher relative margins. SCI said large cemetery sales approached $50 million in the second quarter. President Jay Waring said the company has focused training on sales in the roughly $100,000 to $900,000 range, rather than relying solely on the largest private mausoleum transactions.

Comparable funeral revenue increased $5 million, or about 1%, in the quarter. Comparable core funeral revenue rose $7 million, or approximately 1.5%, as a 3.3% increase in core revenue per service offset a 1.7% decline in core funeral volume. Ryan said funeral-volume declines moderated during April and May, followed by slight growth in June. Preliminary July results indicated volumes were approximately flat from the prior year, he said. Non-funeral home revenue increased more than $2 million, aided by a 9% increase in average revenue per service. However, non-funeral home preneed sales revenue declined $5 million because SCI shifted urn deliveries on p...