How bad is the rise in mortality?
So bad funeral companies are starting to worry.
Today Service Corporation International, the largest for-profit funeral operator in North America, had its quarterly earnings call. SCI had another great quarter, you’ll be pleased to hear! So far in 2022 the company has made almost $500 million in profits – and its stock is up over 15% since last week’s earnings report.
“There is a way that seemeth right unto a man, but the end thereof are the ways of death.” Proverbs 14:12 KJV
SCI’s management seems fairly open with investors. For many years, much of the company’s growth came from buying family-run funeral homes as their operators, umm, died out. The underlying funeral business is slow growth and very predictable.
At least it used to be.
As Thomas L. Ryan, Service Corporation’s chairman and chief executive, told investors Wednesday morning:
If you go back in this industry and particularly with SCI, year-to-year you would see the numbers of deaths — probably in one year you may be down 1% or 2%, in the next year you’re up 1% or 2% which you could predict was pretty good accuracy over a year and over a big footprint like ours what was probably going to happen… 2020 comes along, Covid, game-changer, right. We’re having to do at one point of time 20 percent more funerals which is unheard of in a year versus, let’s say, a year or two before.
So Service Corporation expected that once Covid passed, its business would go back to normal…
What we would have expected is, why wouldn’t we go back towards, let’s say, a 2019 level, maybe you get a percent or so growth of 2019, I would expect that. So that would be a reasonable level that we think would stabilize. And that’s kind of what we anticipated…
Only that’s not what has happened.
What we’re telling you is, the third quarter of this year, we did 15% more calls than we did in the third quarter of 2019. That is not what anybody would have anticipated and that has just a very de minimis amount of Covid deaths [emphasis added] in it.
Read More @ Zero Hedge: HERE