Service Corp Updates Full-Year Outlook on Lower Funeral Volumes

The Tip Desk · November 1, 2026 · 4 min read

Third-quarter revenue reached $1.11 billion as the company now sees full-year adjusted earnings of $3.94 to $4.04 a share.

Service Corporation International (SCI), the largest provider of deathcare products and services in North America, said it now expects full-year 2026 adjusted earnings of $3.94 to $4.04 a share after lower funeral volumes than it originally anticipated, together with higher healthcare costs, selling compensation and advertising and marketing spending tied to preneed sales.

For the fourth quarter, the company expects adjusted earnings of $1.10 to $1.20 a share. It said it still expects year-over-year revenue growth. It maintained full-year adjusted operating cash flow guidance with a midpoint of $1.085 billion and a maintenance capital expenditure outlook of $335 million, implying adjusted free cash flow of about $750 million.

Consolidated revenue for the three months ended September 30, 2026 was $1.11 billion, up $49.2 million, or 5%, from a year earlier. That growth rate accelerated from 4% in the second quarter. GAAP diluted earnings were $1.03 a share, up 24% from $0.83. Adjusted diluted earnings were $0.97 a share, up 11% from $0.87.

The GAAP result included $11.2 million of net gains on non-strategic asset divestitures and impairment charges, compared with $0.4 million of net losses a year earlier. The prior year also included a $0.4 million restructuring charge. The company said higher operating income and a lower share count produced the 11% increase in adjusted earnings.

Net cash provided by operating activities was $296.8 million, up 18% from $252.3 million. Adjusted cash from operations was $296.9 million. The company said the increase was supported by higher operating income and working-capital sources, partially offset by higher cash taxes.

Consolidated funeral revenue was $602.6 million. Comparable funeral revenue rose $18.7 million, or 3.3%, to $588.2 million. Core comparable funeral revenue increased $10.6 million, or 2.3%, on a 2.8% rise in core average revenue per service, partially offset by a 0.5% decline in core funeral services performed. The core cremation rate rose 60 basis points to 58.2%.

Non-funeral home comparable revenue increased $2.7 million, or 10.6%, on an 8.4% rise in average revenue per service and a 2.0% increase in services performed. Non-funeral home preneed sales revenue decreased $1.7 million, or 7.6%, primarily due to a reduction in general agency revenue even as insurance sales production rose 9.3%. Core general agency and other comparable revenue increased $7.1 million, or 12.5%.

Comparable funeral gross profit was $103.8 million, with the gross profit percentage unchanged at 17.6%. The company said the revenue increase was partially offset by higher selling compensation and advertising and marketing expenditures supporting preneed sales production, as well as an increase in health insurance expense. Comparable funeral preneed sales production increased $18.6 million, or 6.1%, to $323.5 million. That growth rate slowed from 7% in the second quarter.

Consolidated cemetery revenue was $504.6 million. The company said the cemetery segment generated 4% growth in comparable revenue, driven by higher recognized preneed property, merchandise and service revenue. Recognized preneed cemetery property revenue grew 1%, while preneed property sales production increased 4%. Comparable cemetery preneed sales production increased 5%, slower than 8% in the second quarter. Cemetery gross profit percentage was 33.2%.

Chairman and Chief Executive Officer Tom Ryan said margins were pressured by higher healthcare costs, higher selling compensation costs and increased advertising and marketing expenditures supporting preneed sales growth. He said the company expects those elevated costs to continue into the fourth quarter, as reflected in the earnings outlook, and that investments in preneed sales production will drive revenue and earnings growth as sales are recognized in the future. He said the impact of those higher costs was partially offset by higher trust fund income and lower corporate general and administrative expenses, primarily reflecting reduced long-term incentive compensation tied to total shareholder return.

The company said it continues to deploy capital across acquisitions, cemetery property development, real estate investments and new funeral home construction. Year to date, it returned $464 million through dividends and share repurchases.