Stewart Enterprises 3Q profit up on debt payment

Stewart Enterprises 3rd-qtr profit rises on early debt payment; adjusted results miss Street

• On 11:36 am EDT, Thursday September 10, 2009

NEW ORLEANS (AP) -- Funeral home and cemetery operator Stewart Enterprises Inc. on Thursday said its fiscal third quarter profit rose 19 percent, boosted by a gain from the early repayment of debt.

But adjusted results fell short of Wall Street expectations, and the stock fell in morning trading.

Net income for the three months ended July 31 rose to $10.8 million, or 12 cents per share, compared with $9.1 million, or 10 cents per share, in the year-ago period.

Stewart said the results included a $5.4 million, or 6 cents per share, gain from paying down certain debt ahead of schedule. Adjusted for that gain and several other items, results came to profit of $4.3 million, or 5 cents per share for the quarter.

Revenue slipped 10 percent to $117.8 million from $130.4 million last year. Funeral revenue fell 3.7 percent, to $66 million, while cemetery revenue slid 16 percent to $51.7 million.

Analysts polled by Thomson Reuters, on average, expected profit of 8 cents per share, on revenue of $119.6 million.

President and CEO Thomas J. Crawford said that while certain aspects of the business, like the number of deaths, cannot be controlled, the company can control its costs. Costs fell in the third quarter by 4 percent, to $98.4 million, in part because a completed Securities and Exchange Commission investigation meant less need for professional services.

Profit fell because the company handled fewer overall funerals, and sales of prearranged services fell in part because of the economic downturn.

Shares of Stewart Enterprises fell 24 cents, or 4.5 percent, to $5.06. The stock has changed hands between $1.67 and $9.74 in the past 52 weeks.

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