Itron and FPL Sign Contract Renewal for Managed Services

Itron, Inc.ITRI recently announced that Florida Power & Light Company (FPL) has signed a seven-year contract renewal for managed services, purchases of new Gen5 hardware and professional services.

About the Previous Deal

The renewal of the deal follows FPL's contract award to Silver Spring Networks, Inc. SSNI in 2007 before its acquisition by Itron. This contract involved the deployment of Silver Spring's wireless IPv6 mesh networking technology, as well as management and control software to connect and control FPL's meters.

What's New Under the Renewal Contract?

Under the renewal contract, FPL will deploy Itron's new Gen5 network hardware and 2,100 new automated feeder switches which will help the former in achieving its network reliability targets. In addition, FPL will replace 1,000 radios from the legacy Distribution Automation systems with Gen5 bridges.

Itron, Inc. Price

Itron, Inc. Price | Itron, Inc. Quote

Notably, FPL will restructure the Itron Distributed Automation system in order to provide end-to-end IP connectivity for greater security and higher network performance. On the other hand, Itron will provide managed services to FPL, ensuring reliable, predictable software delivery, operations and upgrades.

Itron's Backlog to Drive Growth

The FPL contract will contribute to Itron's backlog. Earlier, Itron had stated that it will add more than $1.2 billion of backlog in 2018 from the Silver Spring acquisition, including a new contract with Xcel Energy Inc. XEL . Per the deal, Itron's Gen-5 network platform will connect 1.4 million smart electric meters and distribution automation devices in Xcel's Colorado service territory.

The above-mentioned deals mirror Itron's ability to supply managed and professional services, and technology to better manage energy and water resources. Further, the Silver Spring buyout will assist Itron by strengthening its ability to deliver a broader set of solutions, accelerate pace of growth and innovation in the smart city and industrial IoT markets.

More Contracts to Boost Itron's Performance

Recently, Itron expanded its project with Duke Energy to install an additional 3 million smart meters. It also signed a four-year distributed energy management contract extension with Pepco Holdings to manage its demand-response program. In addition, Itron has booked a five-year contract with NV Energy to implement Itron IntelliSOURCE.

Itron's contracts with Consumers Energy, Cascade Natural Gas Corporation and Questar Gas in North America as well as new business at Sanepar in Brazil, and with SUEZ and Veolia in France will improve the company's backlog. Thus, this rising backlog will stoke the company's organic revenue growth.

Share Price Performance

Year to date, Itron has outperformed its industry with respect to price performance. The stock has gained around 7.6%, while the industry has recorded growth of 6.3% during the same time frame.

Zacks Rank & Stock to Consider

Itron currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same sector includes Teradyne, Inc. TER sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Teradyne has a long-term earnings growth rate of 12%. Its shares have gained 35.7%, over the past six months.

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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 Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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