SERVICE CORP INTERNATIONAL (SCI): ANNOUNCES THIRD QUARTER 2026 FINANCIAL RESULTS
SERVICE CORP INTERNATIONAL (SCI) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 SERVICE CORPORATION INTERNATIONAL ANNOUNCES THIRD QUARTER 2026 FINANCIAL RESULTS AND UPDATES FOURTH QUARTER OUTLOOK Conference call on Thursday, October 29, 2026, at 8:00 a.m. Central Time. HOUSTON, Texas, October 28, 2026 . . . Service Corporation International (NYS
How this was made
The 30-second read
Why it matters
The earnings beat and updated guidance provide a fresh data point for valuation models and may trigger short‑term buying pressure.
Market read
The release offers new earnings data and guidance for a large‑cap consumer discretionary stock, creating actionable insight for traders.
What to watch
Elevated healthcare and compensation expenses may limit near‑term profit expansion.
Service Corporation International reported third-quarter revenue growth, double-digit adjusted EPS and operating-cash-flow growth, and updated fourth-quarter adjusted EPS outlook amid higher healthcare, selling compensation, and advertising costs.
Revenue grew 5%, GAAP diluted EPS increased 24%, adjusted diluted EPS increased 11%, and adjusted operating cash flow increased 11%. Funeral and cemetery preneed sales production increased, but elevated healthcare, selling compensation, and advertising and marketing costs pressured margins and are expected to continue into the fourth quarter.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended September 30, 2026GAAP | $1.11B | – | 5% |
| Revenue, nine months ended September 30, 2026GAAP | $3.31B | – | – |
| Cost of revenue, three months ended September 30, 2026GAAP | $835.0M | – | – |
| Cost of revenue, nine months ended September 30, 2026GAAP | $2.47B | – | – |
| Gross profit, three months ended September 30, 2026GAAP | $272.3M | – | – |
| Gross profit, nine months ended September 30, 2026GAAP | $832.2M | – | – |
| Corporate general and administrative expenses, three months ended September 30, 2026GAAP | $30.6M | – | – |
| Corporate general and administrative expenses, nine months ended September 30, 2026GAAP | $116.3M | – | – |
| Restructuring charge, three months ended September 30, 2026GAAP | — | – | – |
| Gains (losses) on divestitures and impairment charges, net, three months ended September 30, 2026GAAP | $11.2M | – | – |
| Operating income, three months ended September 30, 2026GAAP | $252.9M | – | – |
| Operating income, nine months ended September 30, 2026GAAP | $728.3M | – | – |
| Interest expense, three months ended September 30, 2026GAAP | $65M | – | – |
| Income before income taxes, three months ended September 30, 2026GAAP | $188.8M | – | – |
| Provision for income taxes, three months ended September 30, 2026GAAP | $47.48M | – | – |
| GAAP effective income tax rate, third quarter 2026GAAP | 25.1% | – | – |
| Adjusted effective income tax rate, third quarter 2026non-GAAP | 25.3% | – | – |
| Net income attributable to common stockholders, three months ended September 30, 2026GAAP | $141.3M | – | – |
| Net income attributable to common stockholders, nine months ended September 30, 2026GAAP | $401.9M | – | – |
| Diluted earnings per share, third quarter 2026GAAP | $1.03 | – | 24% |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $2.90 | – | – |
| Earnings excluding special items, three months ended September 30, 2026non-GAAP | $132.6M | – | – |
| Earnings excluding special items, nine months ended September 30, 2026non-GAAP | $392.7M | – | – |
| Diluted earnings per share excluding special items, third quarter 2026non-GAAP | $0.97 | – | 11% |
| Diluted earnings per share excluding special items, nine months ended September 30, 2026non-GAAP | $2.84 | – | – |
| Diluted weighted average shares outstanding, third quarter 2026GAAP | 137.2 | – | – |
| Diluted weighted average shares outstanding, nine months ended September 30, 2026GAAP | 138.5 | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $296.8M | – | 18% |
| Net cash provided by operating activities, nine months ended September 30, 2026GAAP | $869.3M | – | – |
| Net cash provided by operating activities excluding special items, three months ended September 30, 2026non-GAAP | $296.9M | – | 11% |
| Net cash provided by operating activities excluding special items, nine months ended September 30, 2026non-GAAP | $870.3M | – | – |
| Cash taxes included in net cash provided by operating activities excluding special items, three months ended September 30, 2026non-GAAP | $30.9M | – | – |
| Cash taxes included in net cash provided by operating activities excluding special items, nine months ended September 30, 2026non-GAAP | $65.3M | – | – |
| Total capital expenditures, three months ended September 30, 2026other | $99.5M | – | – |
| Total capital expenditures, nine months ended September 30, 2026other | $275M | – | – |
| Maintenance capital expenditures, three months ended September 30, 2026other | $79.5M | – | – |
| Maintenance capital expenditures, nine months ended September 30, 2026other | $226.1M | – | – |
| Combined trust funds return, three months ended September 30, 2026other | (0.7)% | – | – |
| Combined trust funds return, nine months ended September 30, 2026other | 6.2% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Consolidated funeral, three months ended September 30, 2026Comparable funeral revenue increased $18.7 million, led by a 2.8% increase in core average revenue per service, higher matured preneed revenue, higher non-funeral home revenue, and higher core general agency and other revenue. | $602.6M | – | – |
| Consolidated cemetery, three months ended September 30, 2026Comparable cemetery revenue increased $19.4 million, or 4.0%, due to higher core revenue and higher other revenue, including increased trust fund income and endowment care trust fund income. | $504.6M | – | – |
| Consolidated funeral, nine months ended September 30, 2026Gross profit was $349.2 million and gross profit percentage was 19.0%. | $1.84B | – | – |
| Consolidated cemetery, nine months ended September 30, 2026Gross profit was $483.0 million and gross profit percentage was 32.9%. | $1.47B | – | – |
Amounts quoted below without a unit are in millions, as in the filing’s tables. Per-share figures are as printed.
Fourth Quarter 2026 and Full Year 2026 outlook
- NoteFourth quarter 2026 diluted earnings per share excluding special items: $1.10 - $1.20
- NoteFull year adjusted earnings per share: $3.94 to $4.04
- NoteNet cash provided by operating activities excluding special items and cash taxes: $1,175 - $1,235
- NoteCash taxes expected in 2026: $120
- NoteNet cash provided by operating activities excluding special items: $1,055 - $1,115
- NoteMidpoint of net cash provided by operating activities excluding special items: $1,085
- NoteCapital improvements at existing field locations: $140
- NoteDevelopment of cemetery property: $170
- NoteDigital investments and corporate: $25
- NoteTotal maintenance, cemetery development, and other capital expenditures (Maintenance capital expenditures): $335
- NoteExpected adjusted free cash flow: approximately $750 million
Capital returns
- Year to date, we have returned $464 million through dividends and share repurchases.
- Purchase of Company common stock, nine months ended September 30, 2026: $318,942 thousand.
- Payments of dividends, nine months ended September 30, 2026: $145,421 thousand.
What drove it
- Comparable funeral preneed sales production increased $18.6 million, or 6.1%, to $323.5 million.
- Comparable cemetery preneed sales production increased $17.0 million, or 4.8%, to $369.2 million.
- Comparable total funeral average revenue per service increased $162, or 2.8%, to $6,022.
- Comparable cemetery recognized preneed revenue increased $13.6 million, or 4.0%, to $352.1 million.
- Comparable cemetery other revenue increased $7.5 million, or 19.7%, primarily due to increased endowment care trust fund income based on market performance and higher total return distributions.
- Corporate general and administrative expenses declined primarily due to lower long-term incentive compensation expense tied to total shareholder return and a favorable legal settlement.
- Gains on non-strategic asset divestitures of excess land were $11.2 million, compared with a $0.4 million net pre-tax loss in the prior-year quarter.
Concerns
- Lower funeral volumes than originally anticipated are reflected in the earnings outlook.
- Comparable core funeral services performed decreased 0.5%.
- Comparable cemetery gross profit percentage decreased from 34.3% to 33.2%.
- Higher healthcare costs, higher selling compensation costs, and increased advertising and marketing expenditures pressured margins and are expected to continue into the fourth quarter.
- Changes to the cemetery sales compensation structure increased guaranteed hourly wages and caused more selling costs to be recognized in the current period.
- Recognized preneed cemetery property revenue grew 1.2%, while preneed property sales production increased 4.2%, creating near-term pressure on cemetery gross margins.
What to watch
- Fourth-quarter adjusted diluted EPS outlook of $1.10 - $1.20.
- Whether funeral volumes remain below the level originally anticipated.
- The continuing effect of healthcare, selling compensation, and advertising and marketing costs on funeral and cemetery margins.
- Recognition of deferred preneed property, merchandise, and service revenue from the growing backlog.
- Delivery of the full-year adjusted operating cash flow midpoint of $1,085 and maintenance capital expenditure outlook of $335.
- Trust fund performance after combined trust funds returned (0.7)% in the third quarter.
Balance sheet and cash flow
- Cash and cash equivalents at September 30, 2026: $172,653 thousand; December 31, 2025: $243,581 thousand.
- Current maturities of long-term debt at September 30, 2026: $195,060 thousand; December 31, 2025: $56,847 thousand.
- Long-term debt at September 30, 2026: $4,977,888 thousand; December 31, 2025: $5,082,970 thousand.
- Total assets at September 30, 2026: $19,093,247 thousand; December 31, 2025: $18,654,512 thousand.
- Total common stockholders’ equity at September 30, 2026: $1,574,806 thousand; December 31, 2025: $1,638,271 thousand.
- Business acquisitions, net of cash acquired, nine months ended September 30, 2026: $73,262 thousand; 2025: $65,098 thousand.
- Real estate acquisitions, nine months ended September 30, 2026: $16,506 thousand; 2025: $6,610 thousand.
- Net cash used in investing activities, nine months ended September 30, 2026: $470,141 thousand; 2025: $341,419 thousand.
- Net cash used in financing activities, nine months ended September 30, 2026: $467,130 thousand; 2025: $368,877 thousand.
Analysis
Service Corporation International delivered a solid third quarter, with revenue of $1,107.3 million compared with $1,058.1 million in the prior-year quarter. GAAP diluted earnings per share rose 24% to $1.03, while diluted earnings per share excluding special items rose 11% to $0.97. Operating income was $252.9 million compared with $226.4 million, and the quarter included $11.2 million of net gains on divestitures and impairment charges, compared with $0.4 million of net losses in the prior-year quarter.
Funeral revenue was $602.6 million and cemetery revenue was $504.6 million. Comparable funeral revenue increased $18.7 million, with core revenue supported by a 2.8% increase in core average revenue per service, partly offset by a 0.5% decrease in core funeral services performed. Comparable cemetery revenue increased $19.4 million, or 4.0%, as recognized preneed revenue and other revenue increased. Comparable funeral preneed sales production increased 6.1%, while comparable cemetery preneed sales production increased 4.8%, supporting deferred revenue opportunities.
Margins faced identifiable cost pressure. Comparable funeral gross profit percentage was 17.6% in both periods, as revenue gains were partly offset by higher selling compensation, advertising and marketing expenditures, and health insurance expense. Comparable cemetery gross profit percentage declined to 33.2% from 34.3%. Management attributed the decline to the same elevated costs, including higher guaranteed hourly wages under changes to the sales compensation structure. The company stated that more selling costs were recognized in the current period rather than deferred, which will reduce selling compensation expense recognized in subsequent periods.
Cash generation strengthened. Net cash provided by operating activities increased 18% to $296.8 million, while adjusted operating cash flow increased 11% to $296.9 million. The company cited higher operating income and working-capital sources, partly offset by higher cash taxes. For the first nine months, the company spent $318,942 thousand on common-stock repurchases and $145,421 thousand on dividends, while stating that it had returned $464 million year to date through dividends and repurchases.
The fourth-quarter outlook calls for diluted earnings per share excluding special items of $1.10 - $1.20, and full-year adjusted earnings per share of $3.94 to $4.04. Management expects year-over-year revenue growth but cited lower funeral volumes than originally anticipated, continued higher healthcare costs, and higher selling compensation and advertising and marketing expenditures. Full-year adjusted operating cash flow guidance was maintained at a midpoint of $1,085, with maintenance capital expenditures of $335 and expected adjusted free cash flow of approximately $750 million.
Management, verbatim
Today, we reported adjusted earnings per share of $0.97 and adjusted net cash provided by operating activities of $296.9 million, both delivering double-digit growth compared to the prior-year quarter.
Tom Ryan, Chairman and CEO
Our funeral segment delivered solid results, supported by continued growth in average revenue per service and stable funeral service volumes.
Tom Ryan, Chairman and CEO
While we expect these elevated costs to continue into the fourth quarter, as reflected in our earnings outlook, our investments in preneed sales production will drive revenue and earnings growth as sales are recognized in the future.
Tom Ryan, Chairman and CEO
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported third-quarter financial metrics were not provided.
- Actual free cash flow for the third quarter and nine months was not provided.
- A numerical revenue outlook was not provided.
- Forward-looking GAAP diluted earnings per share and GAAP net cash provided by operating activities were not provided because they were not currently accessible on a forward-looking basis.
- No previous-release outlook was provided for comparison.
- Gross margin was not reported on a consolidated basis.
- Quarterly share repurchases and dividends were not separately provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Service Corp International filed a Form 8‑K reporting its third‑quarter 2026 financial results and updating its outlook.
Ticker impact
SCI reported Q3 2026 earnings with EPS up 24% YoY and issued updated guidance for Q4 and full year.
likely modest upside as investors price in stronger earnings and updated guidance
The company posted higher GAAP and adjusted EPS, revenue growth, and updated its adjusted EPS outlook to $1.10‑$1.20 for Q4, indicating improved profitability.
Market effects
Strong results may lift other death‑care and funeral services stocks.
Positive for US consumer discretionary sector.
Limited to North American markets.
Counterpoint
Higher operating costs could pressure margins despite revenue growth.
Key entities
- companyService Corp International
Largest provider of death‑care products and services in North America.
