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Factors to Note Before Service Corporation's (SCI) Q1 Earnings

Zacks Equity Research
·4 min read

Service Corporation International SCI is likely to report growth in the top and the bottom line when it releases first-quarter 2021 numbers on May 3. The Zacks Consensus Estimate for revenues is pegged at $953.6 million, which suggests a rise of 18.8% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for the bottom line has been stable in the past 30 days at 98 cents per share, which indicates a jump of 127.9% from the year-ago quarter’s reported figure. Notably, the bottom line of this provider of deathcare products and services outpaced the Zacks Consensus Estimate by 24.2% in the last reported quarter. It has a trailing four-quarter earnings surprise of 61.3%, on average.

Key Factors to Note

Service Corporation’s top line during the first quarter is likely to have gained from rise in funeral services and burials performed due to higher death rates amid the coronavirus pandemic. This has been boosting the company’s core revenues across the Funeral and Cemetery segments. In the Cemetery segment, core revenues have been gaining from an increase in both atneed and total recognized preneed revenues. Markedly, recognized preneed revenues have been gaining from higher comparable preneed cemetery property sales production, while atneed revenues in the category have been supported by a rise in burials performed. Cemetery atneed revenues are expected to witness considerable year-over-year growth in the first quarter of 2021, as indicated by management in its last earnings call.

Moreover, efforts such as expansion of virtual tools, increased customer sales incentives and greater leads from atneed services and company-generated leads are likely to have supported Service Corporation’s comparable preneed cemetery sales production during the first quarter. Also, the company’s cemetery development measures and construction projects are likely to have been accretive in driving sales.

However, soft preneed sales in the company’s Funeral segment, due to restrictions on social gatherings, have been a concern for the company. Also, adverse impacts stemming from elevated corporate general and administrative costs cannot be ruled out.

Service Corporation International Price, Consensus and EPS Surprise

Service Corporation International price-consensus-eps-surprise-chart | Service Corporation International Quote

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Service Corporation this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Service Corporation currently carries a Zacks Rank #3 and an Earnings ESP of 0.00%.

Stocks Poised to Beat Estimates

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat.

Sysco Corporation SYY currently has an Earnings ESP of +5.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The J. M. Smucker Company SJM has an Earnings ESP of +1.49% and a Zacks Rank #3, at present.

Tyson Foods, Inc. TSN currently has an Earnings ESP of +16.03% and a Zacks Rank #3.

Zacks Names “Single Best Pick to Double”

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You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

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Zacks Investment Research