Service Corporation International Earnings
Service Corporation International (NYSE: SCI), recognized as North America's leading provider in the deathcare industry, has released its financial results for the fourth quarter of 2024. The company showed resilience and growth, cementing its position in the industry with impressive annual earnings.
Financial Metrics Overview
| Metric | Q4 2024 | Q4 2023 | % Change YoY |
|---|---|---|---|
| Total Revenue | $964 million | $927 million | +4% |
| GAAP Earnings Per Share | $1.04 | $0.93 | +12% |
| Adjusted Earnings Per Share | $1.06 | $0.93 | +14% |
Service Corporation International reported a substantial increase in its financial metrics. The total revenue climbed to $964 million, a 4% increase, showcasing the efficacy of its business strategy. Furthermore, GAAP earnings per share improved to $1.04, a significant 12% year-over-year rise. Even more notable is the adjusted earnings per share which soared by 14%, reaching $1.06.
Service Corporation International Results
The fourth quarter results were a testament to the company's robust business model and strategic initiatives. The increase in earnings per share highlights efficient cost management and potential revenue growth avenues. These figures indicate that SCI is not just surviving but thriving by adapting its strategic focus.
Revenue Breakdown
Examining the revenue streams, Service Corporation International's key operational segments — Funeral and Cemetery — demonstrated diverse performance.
Segment Revenue Performance
| Segment | Revenue Change | Comment |
|---|---|---|
| Funeral | +$5.4 million, 1.0% | Growth in general agency revenue offset by declines in services and preneed sales |
| Cemetery | +$20.2 million, 4.2% | Increase in recognized preneed revenue and preneed sales production |
The Funeral segment experienced a modest uptick, largely fueled by the general agency revenue despite a decline in core funeral service revenues. This performance indicates adaptability in revenue streams amidst varying market demands. Meanwhile, the Cemetery segment saw a significant 4.2% revenue surge, driven by preneed sales, showcasing the effectiveness of its strategic long-term planning.
Key Developments
The quarter saw impressive developments:
- Comparable preneed cemetery sales production grew by 2%, sustaining a vigorous sales environment in key segments.
- The company invested considerably, with a capital outlay of $181 million allotted towards acquiring funeral homes and cemeteries in larger metropolitan areas and injecting $62 million into real estate expansion projects.
- Operational efficiency was augmented with significant cost management strategies leading to improved profit margins.
Comments from Company Officers
Tom Ryan, the company's Chairman and CEO, commended the quarter's successful performance and stressed the strategic relevance of the year's achievements. He accentuated how acquisitions and real estate investment are putting the company on a firm path for future growth. Foxing the financial health of the company, Ryan noted, reaffirms their commitment to premium service delivery – a linchpin of their growth narrative over the past years.
Service Corporation International Stock Forecast
Looking ahead, Service Corporation International has set forth a guidance expecting 2025 adjusted earnings per share to fall between $3.70 and $4.00. These figures align with its established growth trajectory, aspiring for an annual growth rate of 8% to 12%. Despite a recent stock price drop of approximately 1.9% post-earnings release, the company's market cap stands strong at $10.45 billion.
Given the recent performance and strategic investments, projections for SCI's stock price may lean towards the higher end of this range if the projected growth follows its historical trajectory. A high projection could see the stock approaching $82-$85, while a conservative estimate, accounting for market volatilities, might hover around the current $75-$78 range.
In conclusion, Service Corporation International appears well-positioned for continued success in 2025 and beyond, bolstered by its solid financial foundation and strategic foresight, despite the immediate market reaction evidenced by a slight dip in stock price. Investors should remain attentive to the company's execution of its long-term strategy and subsequent market movements.
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