) has entered into an agreement to install around 11,000 advanced
residential water meters for the customers of Floresti, Moldova,
through the water utility service, Servicii Comunale Floresti. The
water meter technology will be installed over a period of six
months starting from the end of fiscal 2012.
The advanced residential water meters will be endowed with
communication modules along with a fixed network infrastructure.
All the aging meters of the Floresti will be replaced with Itron's
more advanced version of water meters and installed at the
company's new subscribers' homes.
The fixed network of water meters will transmit the consumption
data. The automation of the meter reading process will be efficient
enough to help in trimming down operational costs.
With this new deal, Itron seizes the opportunities to explore the
high potential of the emerging markets of Moldova; alongside, the
contract will also open up more vistas for the company both to
explore and win new deals in the potential markets in the counties
of Eastern Europe. The deal will thus benefit the company in
expanding its water metering portfolio.
Earlier in June, Itron partnered with Australia's largest water
utility, Sydney Water, to replace old meters with Itron's high
efficiency ones. Henceforth, the residential and commercial
customers of Sydney Water in Sydney will be served with Itron's
water meters for the next three years.
Itron has decided to restructure its manufacturing operations for
increasing efficiency and lowering manufacturing cost. Itron also
has plans to curtail global workforce by 7.5%. The company expects
annualized cost savings of $15 million in 2012; its savings are
projected to grow to $30 million in 2013.
However, Itron will have to incur pre-tax restructuring charges in
the range of $75-$80 million; of which it expects to pay a
considerable portion throughout 2012 and the first half of 2013.
Therefore, operating expenses will increase, creating margin
headwinds in 2012 and first half of 2013.
Itron faces tough competition from
Badger Meter, Inc.
General Electric Company
). The company retains a short-term Zacks #3 Rank (Hold). We have a
long-term Neutral recommendation on the stock.
Based in Liberty Lake, Washington, Itron Inc. 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 distribution customers. It has two
reportable segments: Energy and Water.
BADGER METER (BMI): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis Report
ITRON INC (ITRI): Free Stock Analysis Report
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