Finance

Zacks Research previews SCI earnings report

Foundation Partners why I partnered

We found this report, dated October 21, interesting from Zacks Equity Research.  Here’s an interesting couple of lines from the report. . .”SCI is likely to display year-over-year declines in the top and bottom lines, when it reports third-quarter 2021 numbers on Oct 27. The Zacks Consensus Estimate for revenues is pegged at $800 million, suggesting a drop of 12.9% from the prior-year quarter’s reported figure.”

Service Corporation International is expected to report 3rd Quarter earnings on October 27 (tomorrow).

Here are a couple of other items mentioned in the Zacks report:

  • Service Corporation’s funeral volumes have been seeing tough comparisons with the year-ago period’s increased pandemic-led deaths.”
  • Similar to the funeral volumes, at-need cemetery revenues are expected to decline in the mid- to high-teens percentage rate in the back half of 2021″
  • The preneed cemetery sales production is anticipated to decline at a mid-single-digit percentage rate during the same time period.
  • “. . . elevated staffing and service level comps related to operating at the full-service facilities, compared with the limited-service structure in the year-ago period, poses threats to the company’s margin.

 

Funeral Director Daily take:  I get it. . . .Covid-19 caused many unanticipated deaths in 2020 and we have seen how funeral homes’ revenues increased because of that situation.  I also understand that many funeral homes saved money by going to a Covid-19 staffing level that did not include non-essential employees and that restoring those employees certainly could cause expenses to be up for staffing in 2021.  Finally, I understand that the 3rd Quarter report will be compared to the 2020 3rd Quarter report that encompasses the months of July, August, and September of 2020 where Covid-19 deaths were high, but not as high as the quarter that preceded them.

Tom Anderson
Funeral Director Daily

However, I also noticed this article put out by Forbes on October 6, 2021, that announced that, according to the article, the calendar year of 2021 has had more deaths from Covid-19 than the year of 2020.  If that is the case, shouldn’t a company with funeral homes scattered all across the country continue to have a higher level of deaths?  If true, why the revenue decline, especially now with some moderation of the social distancing rules for funerals?

In any regard, I’m interested to see the SCI numbers.  I’ve always said in Funeral Director Daily that reading the reports from the public companies helped me, in my 300 call firm, to learn about pricing and more.  Take a look at their numbers, compare them on a per case ratio to your numbers, and see if you can learn something.

By the way, the Forbes article linked above made these comments:

  • “As of Wednesday (September 30), U.S. localities have reported 353,000 deaths since January 1, according to data compiled by Johns Hopkins University.  That surpasses the 352,000 deaths reported in 2020 in the 10 months following the first recorded domestic outbreaks of the disease in March.”
  • ” . . the U.S. surpassed 700,000 Covid-19 deaths, more than any other country, and 25,000 more than were killed by the Spanish flu of 1918, making Covid-19 the deadliest pandemic in American history.”

Finally, other death care companies will be reporting their 3Q 2021 results on these dates.

  • Carriage Services  – 10/27
  • Hillenbrand Industries – 11/10
  • Park Lawn Corporation – 11/11
  • Security National Financial Corporation – 11/12
  • Matthews International – 11/18
  • StoneMor – TBA

Disclaimer–  The author of this article holds a stock position in Service Corporation International.

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