The following is a summary of the Service Corporation International (SCI) Q3 2024 Earnings Call Transcript:

Financial Performance:

• SCI reported a slight increase in adjusted earnings per share to $0.79 from $0.78 the previous year, achieved through a balance of increased revenue, offset by higher corporate expenses and interest costs.

• The company saw a $0.01 increase in earnings per share, attributed to lower share count and tax rate adjustments.

• Investments included $123 million in acquisitions and $31 million in real estate, contributing to footprint expansion.

Business Progress:

• SCI experienced modest growth in funeral services with total comparable funeral revenues up $7 million or about 1% over the prior year.

• The company actively expanded with $154 million spent on acquisitions and real estate, adding 10 funeral homes and two cemeteries to its operation.

• Adjustments in pre-need sales contracts are expected to stabilize revenues as they transition from trust to insurance-funded contracts.

Opportunities:

• Expanded investment in high-quality acquisitions and real estate in key metropolitan areas to drive future growth.

• Increased future revenues anticipated from a new pre-need insurance marketing agreement and higher commission rates.

• Continued development of cemetery plots, supporting future pre-need cemetery sales growth.

Risks:

• Funeral volumes may be impacted by demographic shifts and the stabilization of markets post-COVID.

• The transition to insurance-funded pre-need contracts requires sales counselors to obtain insurance licenses, potentially slowing sales temporarily.

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