) first-quarter 2013 adjusted earnings declined 66% to 31 cents
per share compared with 91 cents in the year-earlier quarter,
driven by lower revenue resulting in lower gross profit. Adjusted
earnings fell short of the Zacks Consensus Estimate of 46 cents
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Including one time items, earnings in the quarter came at 6 cents
per share compared with the year-ago quarter's earnings of 63
cents per share.
Total revenue during the quarter fell 22% to $448 million,
missing the Zacks Consensus Estimate of $572 million. The decline
in revenues was mainly due to an unfavorable impact from foreign
currency translation of $5 million and lower revenue in the
Energy segment due to the completion of several OpenWay projects
in North America.
Cost of goods sold declined 21% to $307 million in the reported
quarter. Gross profit also dropped 23.5% to $140 million.
Consequently, gross margin contracted 70 basis points (bps) to
31.3%. The year-over-year decline was driven by lower volumes.
Adjusted operating expenses decreased 3% to $125.3 million in the
quarter. The decline was driven by lower global sales and
marketing, general and administrative costs.
Adjusted operating profit declined 73% to $14.7 million. The
decline was attributable to higher operating expenses, driven by
investment in product development, sales and marketing for future
global smart metering projects. Including one-time items,
operating income was $2.3 million in the reported quarter
compared with $40 million in the year-ago quarter.
: Net sales at the Energy Segment dropped 28.5% to $312.6
million. Gross profit for the segment reduced 29% to $95.5
million. Gross margin also declined slightly over the prior year
to 30.5% as benefits from efficiencies and lower warranty costs
were offset by lower volumes.
: The Water Segment reported sales of $134.9 million in the
quarter, up 1% compared with $133.8 million in the year-ago
quarter. The improvement was driven by an increase in
professional services. Gross profit for the segment dropped 29%
to $95.5 million. Gross margin decreased 300 bps to 33% due to an
increase in professional services which have lower margins.
As of Mar 31, 2013, cash and cash equivalents amounted to $101.5
million versus $136 million as of Dec 31, 2012. Cash flow from
operating activities was $595 thousands in the reported quarter
compared with $54 million in the prior-year quarter. The
debt-to-capitalization ratio declined to 28.8% as of Mar 31, 2013
from 29.2% as of Dec 31, 2012.
Bookings and Backlog
Bookings in the reported quarter were $447 million, while total
backlog at the end of the quarter was $1 billion.
Liberty Lake, Wash-based Itron Inc., along with its subsidiaries,
is one of the principal technology providers to the energy and
water industries worldwide. It produces electricity, gas, water,
and heat meters, data collection and utility software solutions
along with various other associated metering products for
residential, commercial and industrial, and transmission and
Itron belongs to the electrical equipment industry along with
Agilent Technologies Inc.
National Instruments Corp
). Itron currently has a short-term Zacks #4 Rank (Sell).