Q1 2025 Service Corporation International Earnings Call Transcript
Key Points
- Service Corp International (SCI) reported an adjusted earnings per share of $0.96, up from $0.89 in the prior year, indicating strong financial performance.
- The company saw a 4% increase in total comparable funeral revenue, driven by a 2.5% growth in core average revenue per service and a 1% increase in core funeral services performed.
- Funeral gross profit increased by $21 million, with the gross profit percentage rising by 240 basis points to over 24%.
- SCI's transition to an insurance-funded pre-need model is expected to stabilize and grow by the fourth quarter of 2025, indicating future revenue potential.
- The company generated a solid adjusted operating cash flow of $316 million in the quarter, exceeding expectations and improving by over $90 million from the prior year.
- Comparable cemetery revenue decreased by $8 million, or about 2%, primarily due to a $12 million decline in recognized preneed property revenue.
- Preneed funeral sales production decreased by $32 million, or about 10%, over the first quarter of 2024, due to the transition to a new preneed insurance provider.
- Non-funeral home preneed sales production decreased by $20 million, or 26%, as SCI Direct transitions from trust to insurance-funded preneed contracts.
- The company faced a higher effective tax rate due to the non-deductibility of certain excess tax benefits from stock option settlements, impacting earnings per share.
- Corporate G&A expenses increased by $3 million quarter over quarter, driven by higher worker compensation claims and incentive compensation accruals.
Good day, and welcome to the SCI first-quarter 2025 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would like to turn the conference over to SCI Management. Thank you, and over to you.
Good morning, everyone. This is Trey Bocage, Director of Investor Relations and Strategic Finance. Welcome to our first quarter earnings call of 2025. We will have some prepared remarks about the quarter from Tom and Eric in just a minute.
But before that, let me quickly go over the Safe Harbor language. Any comments made by our management team that state our plans, beliefs, expectations, or projections for the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such statements.
These risks and uncertainties include, but are not limited to, those factors identified in
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