Service Corp. cuts 2026 profit forecast; Q3 profit misses estimates

Service Corporation International (SCI) reported third-quarter 2026 adjusted earnings of 97 cents per share on Oct. 28, missing the $1.00 consensus estimate compiled by Finnhub. The company also lowered its full-year adjusted earnings forecast.

Revenue of $1.107 billion was in line with the $1.11 billion consensus estimate compiled by Finnhub, the company said in a regulatory filing.

The company owned and operated 1,491 funeral service locations and 506 cemeteries as of Sept. 30, it said.

Here's how the company did:

• Adjusted EPS: 97 cents vs. 87 cents a year earlier, $1.00 expected, according to Finnhub
• Diluted EPS: $1.03 vs. 83 cents a year earlier
• Revenue: $1.107 billion vs. $1.058 billion a year earlier, $1.11 billion expected, according to Finnhub
• Net cash provided by operating activities: $296.8 million vs. $252.3 million a year earlier

Consolidated revenue grew $49.2 million, or 5%, over the third quarter of 2025.

GAAP diluted EPS included $11.2 million of net gains on non-strategic asset divestitures and impairment charges. Higher operating income and a lower share count drove the 11% growth in adjusted EPS, the company said.

2026 guidance

The company expects fourth-quarter 2026 adjusted EPS of $1.10 to $1.20.

Full-year adjusted EPS is now expected to be $3.94 to $4.04, down from the $4.10 to $4.30 range it gave on July 29.

The company cited lower funeral volumes than it had originally anticipated, along with higher healthcare costs and higher selling compensation and advertising spending to support preneed sales growth. It said it expects revenue growth for the year.

The company maintained its full-year adjusted operating cash flow guidance, with a midpoint of $1,085 million. It also kept its maintenance capital expenditure outlook at $335 million, which it said results in expected adjusted free cash flow of approximately $750 million.

Segment results

Comparable funeral preneed sales production rose 6%. Comparable funeral gross profit increased $3.6 million to $103.8 million, and the gross profit percentage held at 17.6%.

Comparable cemetery revenue increased $19.4 million, or 4.0%. The cemetery gross profit percentage fell from 34.3% to 33.2%, as higher selling compensation and advertising costs offset the revenue gain.

Chairman and CEO Tom Ryan said, “Our funeral segment delivered solid results, supported by continued growth in average revenue per service and stable funeral service volumes.”

Costs and capital returns

Corporate general and administrative expenses were $30.6 million, down from $38.3 million a year earlier. The company attributed the decrease mainly to lower long-term incentive compensation tied to total shareholder return and a favorable legal settlement.

Year to date, the company has returned $464 million through dividends and share repurchases, Ryan said.

The company will host a conference call on Oct. 29 at 8 a.m. Central Time.