Service Corp. (SCI) 4th Quarter Earnings and Revenue Key Estimates

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SService Corp. (SCI) exited with quarterly earnings of $1.17 per share, beating Zacks’ consensus estimate of $1 per share. That compares to earnings of $1.13 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a 17% earnings surprise. A quarter ago, this funeral home and cemetery operator was expected to post a profit of $0.63 per share when it actually produced a profit of $1.16, offering a surprise of 84.13%.

In the past four quarters, the company has exceeded consensus EPS estimates four times.

Service Corp., which is owned by the Zacks funeral services industry, posted revenue of $1.04 billion for the quarter ended December 2021, beating Zacks’ consensus estimate of 3.06%. That compares to revenues of $970.27 million a year ago. The company has exceeded consensus revenue estimates four times in the past four quarters.

The sustainability of the immediate stock price movement based on recently released numbers and future earnings forecasts will primarily depend on management’s comments on the earnings call.

The shares of Service Corp. have lost around 11.2% since the start of the year compared to a decline of -7.3% for the S&P 500.

What’s next for Service Corp.

While Service Corp. has underperformed the market so far this year, the question on investors’ minds is: what’s next for the stock?

There is no easy answer to this key question, but a reliable measure that can help investors answer it is the company’s earnings outlook. This includes not only current consensus earnings expectations for the upcoming quarter(s), but also how those expectations have changed recently.

Empirical research shows a strong correlation between short-term stock movements and trends in earnings estimate revisions. Investors can track these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Prior to this earnings release, the trend in estimate revisions for Service Corp. Mixed. While the magnitude and direction of estimate revisions may change following the release of the company’s earnings report, the current situation translates into a No. 3 (hold) Zacks ranking for the stock. Thus, the shares should move in line with the market in the near future. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the next few quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.80 on $934.95 million in revenue for the upcoming quarter and $2.82 on $3.65 billion in revenue for the current fiscal year.

Investors should be aware that the outlook for the sector can also have a significant impact on stock performance. In terms of Zacks industry rankings, funeral services are currently in the top 7% of Zacks 250+ industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.

Another stock in the same sector, Carriage Services (CSV), has not yet released its results for the quarter ended December 2021. The results are expected to be published on February 23.

This provider of funeral and cemetery services and products is expected to post quarterly earnings of $0.76 per share in its next report, representing a year-over-year change of +33.3%. The consensus EPS estimate for the quarter remained unchanged for the past 30 days.

Carriage Services revenue is expected to be $92.79 million, up 3% from the prior year quarter.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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