What happened

Shares of Service Corporation International (SCI 0.87%), the largest provider of deathcare services in the U.S., such as funerals, cremations, and cemeteries, were gaining after the company delivered strong results in its third-quarter earnings report. As of 3:20 p.m. ET, the stock was up 10.5%.

So what

Overall revenue and profits were down as the company faces difficult comparisons with earlier stages of the pandemic, but results still topped expectations. Revenue in the quarter fell 5.6% to $977.7 million, but that was still well ahead of estimates at $892.6 million. Comparable pre-need cemetery sales rose 5%, while comparable pre-need funeral sales rose 2%, showing the core business continues to grow.

On the bottom line, adjusted earnings per share fell from $1.16 in the quarter a year ago to $0.68, but that also easily beat estimates of $0.51. Management said that compared to Q3 2019, adjusted earnings per share (EPS) have grown by a compound annual growth rate of 22%, compared to expectations of 8%-12% growth.

Additionally, the company announced a dividend hike, raising the quarterly payout 8% to $0.27 a share, giving it a dividend yield of 1.6%. The company's board of directors increased its share-repurchase authorization from $250 million to $600 million. Management has reduced shares outstanding by 6% over the past year.

Now what

Looking ahead, the company also raised its guidance for the year, hiking its adjusted EPS target of $3.30-$3.70 to $3.60-$3.80, a positive sign for future growth. Though the business environment seems to have normalized for SCI, the company should have steady growth ahead, given the comparable sales performance and an aging baby boomer population.