On July 31, 2024, Service Corp International (SCI, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Service Corp International is a personal services company that provides funeral and cemetery services and products from its locations throughout the United States and Canada.
Performance Overview
Service Corp International (SCI, Financial) reported revenue of $1,034.0 million for Q2 2024, a slight increase from $1,013.4 million in Q2 2023. However, the company reported earnings per share (EPS) of $0.81, down from $0.86 in the same quarter last year. Adjusted EPS was $0.79, compared to $0.83 in Q2 2023. These figures fell short of analyst estimates, which projected an EPS of $0.88 and revenue of $1,026.57 million.
Key Financial Achievements
Despite the decline in EPS, SCI achieved several financial milestones:
- Revenue grew by $20.6 million over Q2 2023.
- Net cash provided by operating activities was $196.9 million, up from $144.1 million in the prior year quarter.
- Net cash provided by operating activities excluding special items was $219.9 million, compared to $157.4 million in Q2 2023.
- Comparable core preneed funeral sales production increased by $9.7 million, or 4.0%.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $1,034.0 million | $1,013.4 million |
| Operating Income | $220.8 million | $233.5 million |
| Net Income | $118.2 million | $132.2 million |
| Diluted EPS | $0.81 | $0.86 |
Challenges and Commentary
Tom Ryan, the Company's Chairman and CEO, commented on the second quarter performance:
"Today we reported adjusted earnings per share of $0.79 and net cash provided by operating activities excluding special items of $220 million. Revenue grew $21 million due in part to the performance of the cemetery segment, resulting in slight growth in margins over the prior year quarter. During the latter part of the quarter, we experienced a higher than anticipated decline in funeral services performed, which in light of our high fixed cost structure, impacted our quarterly performance. On a positive note, we generated strong cash flow from operations that met expectations, which allowed us to reinvest and grow our business, as well as return capital to shareholders, through share repurchases and dividends during the quarter."
Financial Metrics and Analysis
Key metrics from the financial statements include:
- Gross profit for Q2 2024 was $257.9 million, down from $261.5 million in Q2 2023.
- Operating income decreased to $220.8 million from $233.5 million in the prior year quarter.
- Interest expense increased to $64.4 million from $59.5 million in Q2 2023.
- The GAAP effective income tax rate for Q2 2024 was 25.3%, up from 24.5% in Q2 2023.
Outlook and Future Guidance
SCI's guidance for 2024 remains unchanged, with adjusted EPS expected to be in the range of $3.50 to $3.80. However, due to the lower-than-expected number of funeral services performed, the company now anticipates results to be at the lower end of this range. The midpoint of the adjusted cash flow from operations guidance remains at $900 million to $960 million.
For more detailed information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from Service Corp International for further details.
