Service Corp Soars To Record As Funeral Company Sees Spike In “Deathcare”
While most Americans have suffered amid the dreadful misery of COVID’s impact (and the policymakers’ responses), there is one group that is benefiting… albeit somewhat morosely.
Service Corp. International surged almost 5% to a new record high this morning after the funeral and cemetery services company announced a big beat on earnings and raised its 2021 outlook.
Both funeral and cemetery segments saw better-than-expected revenue growth on strong pre-need sales, while gross margins also beat expectations on strong cost management and higher volumes, according to Raymond James analyst John W. Ransom.
Service Corp’s Statement:
Today we are reporting earnings per share of $1.33 and net cash provided by operating activities of $298 million for the quarter. The $0.88 growth in earnings per share in the quarter was primarily driven by increased comparable pre-need cemetery sales production and continued elevated COVID-19 mortality, which resulted in an increase in both funeral services performed and burials in our cemeteries.
Comparable pre-need cemetery sales production grew $130 million, or 67%, during the quarter driven by an increase in sales velocity, sales averages, and large sales activity. Net cash provided by operating activities grew approximately $118 million over the prior year quarter, primarily due to increased operating profit.
Based on our first quarter results, we are raising the midpoint of our full year adjusted earnings per share guidance fifteen cents to $2.85 and the midpoint of our adjusted operating cash flow guidance to $687.5 million.
Finally, we wonder, given the success of the vaccination program – and the concomitant collapse in cases, hospitalizations, and deaths…
…what exactly is Service Corp betting on for the rest of 2021 that prompted them to raise the full-year earnings expectations?
Tue, 05/04/2021 – 15:30
Source: Zero Hedge News
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