Itron Beats Estimates - Analyst Blog

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Itron, Inc. ( ITRI ) has reported fourth quarter of 2011 results, delivering adjusted earnings of $1.19 per share compared with 95 cents in the year-earlier quarter. Adjusted earnings surpassed the Zacks Consensus Estimate of $1.00 per share.

Including some special items, there was a loss of $1.35 per share versus earnings of 65 cents per share in the year-ago quarter. The results were hurt by restructuring charges, goodwill impairment and a warranty cost.

Total revenue during the quarter increased 4% to $642.5 million compared with $620.7 million in the prior year quarter. Total revenue comfortably surpassed the Zacks Consensus Estimate of $587 million.


Fiscal 2011 Performance        

In fiscal 2011, adjusted earnings per share amounted to $4.29 compared with $3.89 in the year-ago quarter. Adjusted earnings per share for the full year beat the Zacks Consensus Estimate of $4.11.

Including charges related to restructuring and goodwill impairment, the company's loss per share in fiscal 2011 amounted to $12.56 compared with earnings per share of $2.56 in fiscal 2010.

Total revenue for fiscal 2011 increased 8% to $2.43 million from $2.26 million in 2010. The revenue growth for 2011 was driven by increased projects of electric, gas and water metering in the International segment.

Cost and Margins

Costs of goods sold increased 4% to $450.9 million from $435.3 million in the year-ago quarter. Gross profit also soared to $191.6 million from $185.4 million in the prior-year quarter. However, gross margin was flat year over year at 29.8%.

Operating loss was $60.1 million versus an income of $43.6 million in the year-earlier quarter. The loss was attributable to the increase in restructuring charges and goodwill impairment. Excluding these items, operating income increased to $65.0 million in the reported quarter from $61.2 million in the year-ago quarter.

Financial Position

As of December 31, 2011, cash and cash equivalents declined subsequently to $133.1 million from $169.5 million as of December 31, 2011. Cash from operations also declined to $252.3 million in full year 2011 from $254.6 million in the year ago comparable period.

Debt-to-capitalization ratio as of December 31, 2011, was 33% same as of September 30, 2011 and improved compared with 26% as of December 31, 2010.

Outlook

For FY12, Itron expects revenues in the range of $2.1 billion to $2.3 billion; while EPS is projected in the range of $3.80 to $4.20.

Our Take

The technology-based advanced metering infrastructures (AMI) and automated meter reading (AMR) markets have very bright growth prospects for Itron. Two driving forces facilitating AMI and AMR growth are the cost reduction strategies implemented by almost all the companies to deal with the economic recession and the other is its slow recovery, necessitating efficient allocation of energy supply to meet the increasing demand. We currently have a Zacks #3 Rank (short-term Hold recommendation) on the stock.

Itron is a leading technology provider to the global energy and water industries. It is a world leader in intelligent metering, data collection and utility software solutions, with nearly 8,000 utilities worldwide relying on its technology to optimize the delivery and use of energy and water. It competes with the likes of General Electric Co. ( GE ) and Roper Industries Inc. ( ROP ).


 
GENL ELECTRIC ( GE ): Free Stock Analysis Report
 
ITRON INC ( ITRI ): Free Stock Analysis Report
 
ROPER INDS INC ( ROP ): Free Stock Analysis Report
 
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: GE , ITRI , ROP

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