Service Corporation International SCI posted solid fourth-quarter 2024 results, wherein the top and bottom lines increased year over year and beat the Zacks Consensus Estimate.

The company concluded 2024 on a strong note, with fourth-quarter bottom-line growth being driven by revenue gains across both segments. Higher cemetery preneed sales production and increased funeral general agency revenues compensated for lower services performed during the fourth quarter. For 2025, management expects to deliver robust results, with the midpoint of its projected adjusted earnings per share growth aligning with its long-term target range of 8%-12%.

SCI’s Quarterly Performance: Key Insights 

SCI posted adjusted earnings of $1.06 per share, which came a penny ahead of the Zacks Consensus Estimate of $1.05 while increasing 14% from 93 cents reported in the year-ago period. The upside was driven by greater gross profit, reduced corporate general and administrative expenses and reduced share count, partly countered by the elevated tax rate.

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Total revenues of $1,093 million increased from $1,055 million reported in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $1,085 million.

The gross profit was $305.9 million compared with $287.6 million reported in the year-ago quarter. Corporate general and administrative costs were $15 million, lower than the year-ago period’s figure of $45.1 million.

The operating income of $262.2 million increased from $242.1 million reported in the year-ago quarter.

Decoding SCI’s Segment-Wise Results

Consolidated Funeral revenues came in at $587.7 million in the quarter compared with $573.2 million reported in the year-ago period. Total comparable funeral revenues rose 1%. The upside was backed by an increase in core general agency and other revenues. This was somewhat negated by a drop in core funeral revenues and non-funeral home preneed sales revenues.

Core funeral revenues fell 1.8% due to lower core funeral services performed, somewhat made up by higher core average revenue per service. The core cremation rate rose by 100 basis points (bps) to 57.5%.

Non-funeral home preneed sales revenues dropped by 25% due to a fall in non-funeral home preneed sales production. Comparable preneed funeral sales production tumbled 9.2%. Core preneed sales production fell 6.2% due to a shift to a new preneed insurance provider. Non-funeral home preneed sales production declined 19.7% because of a shift from trust to insurance-funded contracts.

Comparable funeral gross profit came in at $125.9 million, up $3.6 million. The gross profit expanded 40 bps to 21.9%.

Consolidated Cemetery revenues came in at $505.3 million compared with $482.6 million reported in the year-ago quarter. Total comparable cemetery revenues jumped 4.2% year over year on increased core revenues. Core revenue growth stemmed from higher total recognized preneed revenues, elevated recognized preneed property revenues, and increased recognized preneed merchandise and service revenues.

Comparable preneed cemetery sales production rose 2%, driven by strong large sales activity. Core preneed cemetery sales production was nearly flat year over year.

Comparable cemetery gross profit came in at $179.6 million, up by $14.1 million. The gross profit margin expanded by 150 bps to 35.8%. 

Service Corporation: Other Financial Aspects

The company ended the quarter with cash and cash equivalents of $218.8 million, long-term debt of $4,751.4 million and total equity of around $1,678 million.

Net cash from operating activities amounted to nearly $944.9 million during the 12 months ended Dec. 31, 2024. During the same period, the company incurred total capital expenditures of $112.3 million.

What to Expect From SCI in 2025?

For 2025, management envisions adjusted earnings per share (EPS) in the band of $3.70-$4.00.

Net cash provided by operating activities (excluding special items and cash taxes) is anticipated in the range of $1,005-$1,065 million. Net cash provided by operating activities (excluding special items) is expected in the range of $830-$890 million. Management expects total maintenance capital expenditures of roughly $315 million for the year.

Shares of this Zacks Rank #3 (Hold) company have tumbled 11.8% in the past three months compared with the industry’s decline of 9.1%.

Three Solid Bets

United Natural Foods, Inc. UNFI currently sports a Zacks Rank of 1 (Strong Buy). UNFI delivered a trailing four-quarter earnings surprise of 553.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for United Natural’s current financial-year sales and earnings indicates growth of 0.3% and 442.9%, respectively, from the year-ago period’s reported figure.

TreeHouse Foods THS, a private-brand snacks and beverages company, presently holds a Zacks Rank #2 (Buy). THS delivered a trailing four-quarter earnings surprise of 20.4%, on average.

The Zacks Consensus Estimate for TreeHouse Foods’ full-year 2025 sales and earnings implies growth of 1.2% and 24.9%, respectively, from the year-ago period’s reported figure.

US Foods Holding USFD, which engages in the marketing, sale and distribution of fresh, frozen, and dry food and non-food products, currently carries a Zacks Rank #2. USFD delivered a positive earnings surprise of 3.7% in the last reported quarter.

The consensus estimate for US Foods’ full-year sales and earnings calls for growth of 5.2% and 22.1%, respectively, from the prior-year reported levels.

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