Key Highlights

  • Adjusted EPS of USD 0.97 rose 11% year over year but fell short of the USD 0.99 consensus estimate.
  • Revenue grew 5% to USD 1.107 billion, topping the USD 1.10 billion consensus estimate for the third quarter.
  • GAAP diluted EPS increased 24% to USD 1.03, helped by USD 11.2 million of net divestiture gains.
  • Operating cash flow rose 18% to USD 296.8 million, and USD 464 million was returned year to date.

Service Corporation International (NYSE:SCI) reported third-quarter 2026 adjusted earnings per share of USD 0.97, up 11% from USD 0.87 a year earlier but below a consensus estimate of USD 0.99. Revenue reached USD 1,107.3 million, up from USD 1,058.1 million and above a consensus estimate of USD 1.10 billion. On a GAAP basis, diluted EPS was USD 1.03 against USD 0.83, with net income attributable to common stockholders of USD 141.3 million.

The GAAP figure included USD 11.2 million of net gains on non-strategic divestitures and impairments, compared with USD 0.4 million of net losses a year ago. Operating income rose to USD 252.9 million from USD 226.4 million, and diluted shares declined to 137.2 million from 141.4 million, which contributed to the adjusted EPS gain.

Funeral and Cemetery Segment Results

Funeral revenue was USD 602.6 million, up from USD 574.1 million, with gross profit of USD 104.9 million and a margin of 17.4% versus 17.3%. Funeral services performed totaled 86,278 against 84,636. On a comparable basis, services were flat at 83,638 and core average revenue per service rose 2.8%. The core cremation rate increased 60 basis points to 58.2%.

Cemetery revenue grew to USD 504.6 million from USD 484.0 million, while gross profit edged up to USD 167.4 million. The margin narrowed to 33.2% from 34.3%. CEO Tom Ryan attributed margin pressure to higher healthcare costs, selling compensation, and advertising and marketing spending tied to preneed growth. Comparable funeral preneed sales production rose 6% and comparable cemetery preneed sales production rose 5%.

Updated Outlook and Cash Flow Targets

The company guided to fourth-quarter adjusted EPS of USD 1.10 to USD 1.20 and to full-year adjusted EPS of USD 3.94 to USD 4.04. It said this range reflects year-over-year revenue growth, lower funeral volumes than originally anticipated, and the continued impact of higher healthcare, selling and advertising costs. Management projects those costs to persist into the fourth quarter.

Full-year adjusted operating cash flow guidance was maintained, with a midpoint of USD 1,085 million, alongside maintenance capital spending of USD 335 million, which implies adjusted free cash flow of roughly USD 750 million. Interest expense was USD 65.0 million for the quarter, and the balance sheet carried USD 4,978 million of long-term debt plus USD 195 million of current maturities. Dividend payments totaled USD 145.4 million over nine months.

Watch List for the Coming Quarter

Four items frame the next report. The first is the fourth-quarter adjusted EPS range of USD 1.10 to USD 1.20 against USD 0.97 in the third quarter. The second is cemetery gross margin, at 33.2% versus 34.3%, with preneed property sales production up 4% while recognized preneed property revenue rose 1%. The third is funeral volume, where comparable services were flat and the outlook cites lower volumes than first anticipated. The fourth is the cash flow guide, with a midpoint of USD 1,085 million before USD 335 million of maintenance capital spending.