Service Corporation International SCI posted results for the second quarter of 2026, wherein both top and bottom lines beat the Zacks Consensus Estimate and increased year over year.
Taking a Closer Look at SCI’s Quarterly Results
SCI reported adjusted earnings of 90 cents per share, which beat the Zacks Consensus Estimate of 89 cents. The metric increased 2.3% from adjusted earnings of 88 cents per share in the year-ago quarter.
Service Corporation International Price, Consensus and EPS Surprise
Service Corporation International price-consensus-eps-surprise-chart | Service Corporation International Quote
Total revenues of $1,103.3 million increased 4% from $1,065.4 million in the year-ago quarter. Revenues beat the Zacks Consensus Estimate of $1,081 million.
Gross profit rose 0.8% to $273.5 million from $271.4 million last year. The gross margin increased 70 basis points to 24.8%.
Corporate general and administrative expenses were $41.8 million compared with $49.5 million in the prior-year period.
Operating income rose 3.2% to $231.6 million from $224.5 million in the year-ago quarter.
SCI Provides Insights by Segments
Funeral: Total funeral revenues reached $604.8 million, up from $591.4 million in the second quarter of 2025. Gross profit decreased to $110.3 million from $116 million a year ago, while the gross margin was 18.2% compared with 19.6% in the prior-year quarter. SCI performed 87,347 funeral services, slightly higher than 87,014 services in the year-ago quarter. Average revenue per service increased 3.1% to $5,985 from $5,807.
Comparable funeral revenues jumped 0.9% year over year to $592.9 million. Comparable core revenues rose 1.5%, supported by a 3.3% increase in core average revenue per service, partially offset by a 1.7% decline in core services performed.
Comparable funeral gross profit decreased 5.8% to $109.8 million, and the gross margin contracted 130 basis points to 18.5%.
Comparable preneed funeral sales production rose 6.6% to $323.3 million, reflecting an 8.3% increase in core preneed sales production.
Cemetery: Total cemetery revenues were $498.5 million, up from $474.1 million in the second quarter of 2025. Gross profit increased 5% to $163.2 million from $155.5 million, while the gross margin decreased 10 basis points to 32.7%.
Comparable cemetery revenues increased 4.8% to $496.9 million, driven by higher core revenues and higher other revenues.
Comparable gross profit rose 4.3% to $162.2 million, and the gross margin decreased 20 basis points to 32.6%.
Comparable preneed cemetery sales production increased 8% to $399.5 million, driven by a higher number of contracts sold, an increase in average sales value and greater contributions from large sales.
SCI’s Financial Health Snapshot
The company ended the quarter with cash and cash equivalents of $260.4 million, long-term debt of $5,108 million and total equity of $1,537.8 million.
Net cash provided by operating activities was $238.7 million and adjusted cash provided by operating activities was $238.8 million in the second quarter.
Total capital expenditure was $95.7 million, including $29.6 million for capital improvements at existing field locations, $44.5 million for the development of cemetery property, $6 million for digital investments and corporate initiatives, and $15.6 million for growth capital expenditure related to new funeral service locations.
What to Expect From SCI in 2026?
The company confirmed the mid-point of its 2026 earnings guidance and raised the cash flow outlook. The mid-point of earnings per share (EPS) guidance is $4.20, while the range has been narrowed to $4.10-$4.30 from the previously stated $4.05-$4.35. At the midpoint, the company expects adjusted earnings growth within its long-term target of 8-12%.
The company’s cash flow guidance has been increased. Net cash provided by operating activities, excluding special items and cash taxes, is projected in the range of $1,175-$1,235 million, up slightly from the prior stated $1,125-$1,185 million.
After accounting for cash taxes, net cash provided by operating activities, excluding special items, is expected between $1,055 million and $1,115 million, compared with the previously mentioned $1,005-$1,065 million.
The company expects maintenance capital expenditures of approximately $335 million in 2026.
This Zacks Rank #2 (Buy) stock has gained 7.4% in the past three months compared with the industry’s growth of 4.6%.
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Other Consumer Staple Stocks to Consider
Carriage Services, Inc. CSV provides funeral and cemetery services, and merchandise in the United States. It currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Carriage Services’ current fiscal-year sales and earnings implies growth of 6.1% and 8.4%, respectively, from the prior-year reported levels. CSV delivered a trailing four-quarter earnings surprise of 0.5%, on average.
Darling Ingredients Inc. DAR develops, produces and sells sustainable natural ingredients from edible and inedible bio-nutrients in North America, Europe, China, South America and internationally. At present, Darling Ingredients holds a Zacks Rank of 2. DAR delivered a trailing four-quarter earnings surprise of 16.1%, on average.
The consensus estimate for Darling Ingredients’ current fiscal-year sales and earnings implies growth of 13.2% and 642.7%, respectively, from the year-ago figures.
US Foods Holding Corp. USFD engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2. US Foods Holding delivered a trailing four-quarter earnings surprise of 1.4%, on average.
The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago figures.
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This article originally published on Zacks Investment Research (zacks.com).