In a Press Release dated April 26, 2017, Service Corporation International announced that they earned $0.38 per share in the first quarter as compared to their 2016 result of $0.28 for the same time period.  Tom Ryan, the company’s CEO explained, ” Strong preneed cemetery sales production and an increase in funeral services performed were the primary factors that drove the earnings improvement for the quarter.”

Other Highlights included:

• Revenue of over $777 million as compared to 2016 revenue of $749 million
• Operating margins slightly increasing to 22.6% as compared to 21.8%
• Services performed were 82,916 as compared to 2016’s 82,198
• Average Revenue/Case increased to $5,257 from $5,211

The company also announced that preneed funeral sales production increased by 1.8% primarily due to continued growth from their non-funeral home channel.

Funeral Director Daily take:  In my opinion, if I read the report correctly, it is very interesting and may start to tell of some trends.  As cremation continues to grow over earth burial we all expect Revenue per Case to drop at some point in time.  SCI’s revenue per case increased only $46 per case over the course of a year – that is less than a 1% increase.  Are we nearing the top end and will Revenue per Case start to reverse itself soon?

Margins increasing is indicative of more cremation services but you have to increase margin more than about 1.5% per year if you are losing casketed sales volume.

It also appears that while they did more in “Core” Revenue, their matured preneed sales were higher than a year ago, but their at-need death sales look about 2% lower than the previous year.  Does this mean that market share is being eroded?

It is always interesting to look at and read these reports and then hypothesize on what is happening.  In today’s death care market it is really interesting to watch.  More so than ever, owners and managers have to be on their toes to spot emerging trends so that they can capitalize on them.[wpforms id=”436″ title=”true” description=”true”]