Service International (SCI) Q3 2026 Earnings Report

The call was mixed but cautiously constructive. SCI delivered double-digit adjusted EPS and operating cash flow growth, strong preneed sales production, robust liquidity, and continued capital deployment. However, results were below internal expectations, funeral volumes remained weak, costs increased faster than expected, cemetery revenue recognition was delayed, and full-year EPS guidance was reduced. Management expressed confidence in improving trends and cost actions for 2027, but the near-term outlook remains pressured.

SCI provided fourth quarter 2026 adjusted earnings per share guidance of $1.10 to $1.20, with full year normalized earnings per share at the midpoint of the guidance range expected to be approximately $3.99; full year volumes are projected to be approximately 200 basis points below initial expectations, preneed cemetery sales production is expected to grow 6% to 7% for the year, and 2026 adjusted operating cash flow guidance remains $1.05 billion to $1.11 billion, with a midpoint of $1.08 billion, maintenance CapEx of about $335 million, adjusted free cash flow of $750 million, cash taxes of approximately $120 million, and a full year effective tax rate of 25% to 26%. For 2027, SCI expects continued strength in preneed sales production, comparable funeral volumes to be flat to slightly higher, and to be in that guidance range, while fourth quarter volumes are projected to be down slightly as compared to the prior year.