America’s largest owner of funeral homes reported their 2018 4th quarter and 2018 Year End results on Monday, February 18. You can read a copy of the press release from Service Corporation International here.
For the year, Service Corporation reported revenue of $3.190 billion as compared to 2017’s $3.095 billion — an increase in revenue of about 3%.
Tom Ryan, the company’s Chairman and CEO stated in the release, “We delivered a solid quarter as we closed out 2018 and we are pleased to report an 8% increase in adjusted earnings per share. Double-digit growth in our preneed cemetery sales production drove cemetery profit higher. This along with increased profit from newly acquired businesses were somewhat offset by lower funeral segment profit.”
Ryan also commented that looking ahead SCI is well positioned to deliver solid results. He stated that they have a long-term targeted growth range of 8% to 12%.
Funeral Director Daily take: It is difficult for us, and for many funeral homes, to learn a lot from the operations of Service Corporation International. Their sheer size is simply so much bigger than the rest that the operations are hard to compare to family owned funeral homes.
However, I always enjoy breaking down the SCI report and looking at their per service revenue. That gives you an idea what is happening in the big picture across North America. From the press release we were able to notice that what Service Corporation International calls “Comparable Revenue” – that is what they term “same store” revenue – actually dropped slightly in the funeral sector for the 4th quarter. Funeral Core Revenue dropped from $395.3 million for the 4th quarter of 2017 to $384.1 million for the same period in 2018.
We also notice that for the same period average revenue per service in the funeral sector dropped from $5,298 in the 4th quarter of 2017 to $5,221 for the 2018 period. That is a small drop – but a drop nonetheless – and probably precipitated by a rise in their reported total comparable cremation rate from 54.0% to 55.7%.
Those numbers are always interesting to watch and are more than likely indicative of America’s continued growth of cremation services.