Service Corporation International Q3 2026: Revenue Beat, Earnings Miss, Guidance Cut
As seen on the 24/7 Wall St. homepage on October 28, 2026.
Revenue topped expectations but adjusted earnings missed expectations, and management cut full-year guidance to $3.94 to $4.04 per share on softer funeral volumes and higher healthcare, selling and marketing costs. The preneed spending push is a bet on future quarters.
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Service Corporation International posted Q3 2026 revenue of $1.11 billion, ahead of expectations, while adjusted EPS of $0.97 came in missing expectations.
The earnings shortfall traced to healthcare expenses, selling compensation tied to a restructured preneed sales model, and advertising spending. Cemetery gross margin contracted as preneed costs land now and revenue recognition is deferred into future quarters.
Management trimmed full-year 2026 adjusted EPS guidance to a range of $3.94 to $4.04 on softer funeral volumes and elevated costs that CEO Tom Ryan said are expected to persist into Q4. The full-year adjusted operating cash flow outlook was held steady.
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Higher selling compensation and marketing spend are compressing near-term margins while the company builds a backlog of deferred cemetery property sales. Comparable cemetery preneed sales production rose 4.8% in the quarter, gains management argues will convert into earnings growth as those sales are recognized later.
The company has now missed estimates in two of the last three quarters, and the guidance cut resets near-term expectations. Operating cash flow grew 17.65% year over year, so cash generation remains solid even as reported earnings disappoint. Keep an eye on the stock as Q4 approaches.
Sources
Mentioned: SCI