Service 2025 Q2 Earnings Steady Performance with Net Income Up 4%

Service Corporation International (SCI) reported its fiscal 2025 Q2 earnings on July 31st, 2025. The company posted a 0.8% increase in total revenue, reaching $956.33 million, compared to $949.03 million in the previous year. Earnings per share rose by 7.4% to $0.87, while net income grew by 4.0% to $122.92 million from $118.22 million in Q2 2024. Service's results met analysts' expectations, and the company raised its cash flow guidance, signaling optimism in sustaining growth throughout the year.

Revenue
Service Corporation International reported an increase in total revenue for the second quarter of 2025, reaching $956.33 million, up 0.8% from the previous year. Funeral revenue contributed $591.37 million, buoyed by Atneed revenue of $296.11 million and matured preneed revenue of $183.50 million. The non-funeral home revenue amounted to $25.75 million, complemented by non-funeral home preneed sales revenue of $26.42 million. The core general agency and other revenue totaled $59.58 million. In the cemetery segment, revenue reached $474.08 million, with Atneed revenue making up $111.02 million. Recognized preneed property revenue contributed $220.42 million, while recognized preneed merchandise and services revenue added $105.85 million. Other revenue accounted for $36.79 million, bringing the total revenue from customers to $1.07 billion.

Earnings/Net Income
Service's earnings per share (EPS) improved by 7.4%, reaching $0.87 in Q2 2025 from $0.81 in the same quarter of the previous year. Furthermore, net income experienced a 4.0% growth, climbing to $122.92 million from $118.22 million in Q2 2024. The EPS indicates positive performance.

Post-Earnings Price Action Review
The strategy of buying SCI stock when earnings exceed expectations and holding for 30 days has delivered moderate returns but fell short of the benchmark. This approach yielded a return of 63.46%, whereas the benchmark achieved 85.57%. The strategy's Sharpe ratio of 0.43 reflects a reasonable risk-adjusted return. Despite this, the strategy demonstrated resilience during downturns, evidenced by a maximum drawdown of 0.00%, indicating no significant losses. Overall, while the returns were stable, they were not as robust as the benchmark, suggesting that SCI's post-earnings performance might benefit from refined strategies to maximize gains.

CEO Commentary
Tom Ryan, Chairman and CEO of Service Corporation International, expressed satisfaction with the 11% increase in adjusted earnings per share to $0.88. He attributed this growth to higher funeral revenue and effective fixed cost management, which drove a 14.8% rise in comparable funeral gross profit. Ryan noted that switching to a preferred preneed insurance provider improved revenue per funeral. In the cemetery segment, increased preneed sales production contributed to modest revenue growth, positioning the company favorably for future periods. Ryan reaffirmed the commitment to long-term growth, leveraging scale, and enhancing shareholder value, thanking the company's associates for their dedication.

Guidance
Service Corporation International confirms its 2025 earnings per share guidance and raises its cash flow guidance. The company believes it is well-positioned to achieve its targeted results for the year, driven by ongoing focus on revenue growth and effective capital investment. The management anticipates that increased sales production in both funeral and cemetery segments will support future performance, reflecting confidence in sustaining growth momentum throughout the year.

Additional News
In recent weeks, Service Corporation International (SCI) has made strategic moves to enhance its market position. The company announced a notable leadership change, appointing a new Chief Financial Officer to steer its financial strategies. Additionally, SCI declared a quarterly dividend payout, reinforcing its commitment to returning value to shareholders. Furthermore, the company initiated a stock buyback program, aiming to optimize its capital structure and boost shareholder confidence. These developments demonstrate SCI's proactive approach in bolstering its leadership and financial strategies while maintaining a focus on shareholder value.