Wednesday, Service Corporation International (SCI), a provider of deathcare products and services, reported that its profit for the third quarter increased from the previous year quarter, despite a decline in revenues, as gross margin improved as a result of cost control initiatives. The company also provided guidance for the fourth quarter and fiscal year 2010, while revising its outlook for the full year 2009.
The company posted third-quarter net income attributable to stockholders of $31.2 million compared to $14.6 million last year. Earnings per share doubled $0.12 from $0.06 a year ago.
Income from continuing operations increased to $30.56 million from $14.77 million last year.
Earnings from continuing operations, excluding special items, increased to $32.4 million or $0.13 per share from $23.9 million or $0.09 per share last year.
On average, five analysts polled by Thomson Reuters expected the company to report a profit of $0.07 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues decreased to $497.2 million from $516.4 million last year. Analysts expected revenues of $480.73 million for the quarter.
Funeral gross profit increased $9.5 million, or 16.0%, and funeral gross margin percentage improved to 20.9% from 16.9% as significant efficiencies obtained from cost control initiatives more than offset declines in funeral services performed. The company reported that the cemetery gross profit increased $9.4 million, or 40.7%, and cemetery gross margin percentage improved to 19.3% from 13.9% due to an increase in preneed cemetery property sales, higher cemetery trust fund income and reductions in costs compared to prior year levels, which were partially offset by lower atneed revenues in the third quarter.
For the nine months, net income attributable to common stockholders was $88.8 million or $0.35 per share versus $87.6 million or $0.33 per share last year. The company recorded revenues for the nine months of $1.52 billion versus $1.63 billion for the previous year period.
Looking ahead, the company expects fourth-quarter earnings from continuing operations excluding special items in a range of $0.09 to $0.11 per share. Analysts currently anticipate the company to post earnings of $0.10 per share for the fourth quarter.
The updated fiscal 2009 earnings guidance from continuing operations excluding special items is in the range of $0.46 to $0.48 per share. Analysts expect the company to earn $0.41 per share for the full year.
Further, Service Corporation expects fiscal 2010 earnings from continuing operations excluding special items in the range of $0.45 to $0.53 per share. Analysts expect earnings of $0.46 per share for the full year 2010.
SCI closed Wednesday's regular trading at $6.89 up $0.11 or 1.62% on a volume of 1.496 million shares on the NYSE.
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