Service Corporation International SCI posted results for the first quarter of 2026, wherein earnings missed estimates as funeral volumes normalized from an unusually strong prior-year flu season, partly offset by resilient pricing, disciplined cost control and solid cemetery preneed momentum.
The company’s adjusted earnings of 97 cents per share rose 1% year over year while missing the Zacks Consensus Estimate of $1.00. Revenues increased 2.1% year over year to $1,096.5 million and beat the consensus mark of $1,088 million. Comparable cemetery preneed sales production rose 10% in the quarter, helping offset softer funeral volumes.
SCI generated operating income of $243.8 million in the first quarter of 2026, down from $251.7 million a year ago.
Service Corporation International Price, Consensus and EPS Surprise
Service Corporation International price-consensus-eps-surprise-chart | Service Corporation International Quote
SCI’s Funeral Results Weaken on Volume Declines
The Zacks Rank #4 (Sell) company’s funeral segment faced a volume-driven headwind in the quarter. Total funeral revenues were $630.6 million versus $639.5 million in the first quarter of 2025, reflecting lower activity across core and non-funeral home channels.
Profitability in the segment also softened. Funeral gross profit fell to $134 million from $154 million, with gross margin contracting to 21.2% from 24.1%. Funeral services performed declined to 93,686 from 97,854, though average revenue per service increased to $5,919 from $5,748.
Comparable funeral revenues decreased to $620.2 million from $637.6 million, as core volumes moved lower. Comparable gross profit declined to $132.6 million from $155.4 million, and the comparable gross margin compressed to 21.4% from 24.4%, highlighting the impact of lower revenues across a high fixed-cost structure.
Service trends were mixed across categories. Comparable atneed services performed were 47,978 compared with 52,187 a year ago, while matured preneed services were 28,509 versus 29,724. Even with fewer services, total comparable average revenue per service rose to $5,947 from $5,754, and the core cremation rate edged up to 57.8% from 57.4%.
SCI’s Cemetery Segment Delivers Strong Growth
Service Corporation’s cemetery segment was the quarter’s clear bright spot. Cemetery revenues increased to $465.9 million from $434.7 million in the year-ago quarter, supported by higher recognized preneed property revenues of $209.6 million versus $188.7 million, and higher recognized preneed merchandise and service revenues of $106.3 million versus $98.5 million.
Margin performance improved alongside growth. Cemetery gross profit rose to $152.5 million from $137.4 million, and gross margin expanded to 32.7% from 31.6%, reflecting favorable operating leverage as recognized preneed activity increased.
Comparable cemetery revenues rose to $465.5 million from $434.7 million, driven by higher core revenues of $424.7 million versus $399.5 million and higher other revenue of $40.8 million versus $35.2 million. Comparable gross profit grew to $152.5 million from $137.5 million, and the comparable gross profit percentage improved to 32.8% from 31.6%.
Comparable cemetery preneed sales production increased to $356.2 million from $324.6 million, while total preneed and atneed sales production rose to $466.5 million from $437.8 million. The recognition rate was 91% compared with 91.3% in the prior-year quarter.
SCI’s 2026 View Reaffirmed, Cash Flow Improves
Service Corporation’s adjusted operating cash flow increased to $334.5 million for the first quarter, driven by favorable working capital movements. Total capital expenditures were $79.9 million compared with $78.2 million a year ago, reflecting continued investment in field locations, cemetery development and growth projects.
SCI ended the quarter with cash and cash equivalents of roughly $258 million, while long-term debt was nearly $5.11 billion.
Management reaffirmed 2026 guidance for diluted earnings per share excluding special items of $4.05-$4.35 and net cash provided by operating activities excluding special items of $1.005-$1.065 billion, with maintenance capital expenditures expected to total $325 million.
Shares of SCI have risen 10.8% year to date, in line with the industry.
Consumer Staple Stocks to Consider
Smithfield Foods, Inc. SFD produces various packaged meats and fresh pork products in the United States and internationally. It carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Smithfield Foods’ current financial-year sales and earnings indicates growth of 1.3% and 7.5%, respectively, from the prior-year reported levels. SFD delivered a trailing four-quarter earnings surprise of 12%, on average.
Tyson Foods, Inc. TSN operates as a food company through the Beef, Pork, Chicken and Prepared Foods segments. TSN currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Tyson Foods’ current fiscal-year sales calls for growth of 4.4%, while the consensus mark for earnings indicates a decline of 4.1% from the year-ago figures. TSN delivered a trailing four-quarter earnings surprise of 16.5%, on average.
Post Holdings POST operates as a consumer-packaged goods holding company. At present, POST carries a Zacks Rank of 2. Post Holdings delivered a trailing four-quarter earnings surprise of 19.6%, on average.
The consensus estimate for Post Holdings’ current fiscal-year sales and earnings implies growth of 2.7% and 0.1%, respectively, from the year-ago figures.
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Tyson Foods, Inc. (TSN): Free Stock Analysis Report
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Post Holdings, Inc. (POST): Free Stock Analysis Report
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