Back to top

Analyst Blog

On Jul 12, we maintained our Underperform recommendation on Itron, Inc. (ITRI - Analyst Report) based on decline in bookings and backlog, a challenging U.S. market, muted spending in European countries and recent weakness in the Latin American residential business.

Why Reiterated?

Itron’s first-quarter 2013 adjusted earnings fell 66% year over year to 31 cents per share, while revenues dipped 22% to $448 million. The decline in revenues was mainly due to the Energy segment after the completion of several OpenWay projects in North America.

The company witnessed surprisingly weak demand trends in January/February. Though it somewhat improved in March/April, there were some regional issues. Given the weak start to the year, Itron will need contribution from new large contract wins to achieve its full-year growth target. Furthermore, the completion of the OpenWay projects is expected to impact revenues negatively in the next few quarters.

Itron’s bookings in the quarter declined to $447 million from $467 million in the preceding quarter and backlog at the end of the quarter was $1.029 billion versus $1.035 billion at the end of the fourth quarter of 2012.

Itron did not provide specific 2013 guidance based on its bi-annual guidance policy. However, the company indicated that growth will be slow across several of its businesses. Some countries in Europe will continue to restrict spending and adopt austerity plans, which will also affect Itron’s utility customers.

The company continues to face a more challenged competitive environment in the U.S. for water and gas metering markets as an increasing number of vendors are focusing on these segments to offset softer electric AMI markets. The company also noted a slowdown in Latin America residential business largely due to Brazil’s decision to ramp back its smart meter mandates.

Other Stocks to Consider

In contrast to Itron, other stocks in the industry that are currently performing well and have a good visibility include Analogic Corporation (ALOG - Snapshot Report), Cognex Corporation (CGNX - Snapshot Report) and FEI Company (FEIC - Snapshot Report). All these three stocks carry a Zacks Rank #2 (Buy)

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
QIHOO 360 T… QIHU 95.10 +5.01%
PILGRIM'S P… PPC 31.52 +3.72%
E COMMERCE… DANG 13.13 +3.47%
CLAYTON WIL… CWEI 138.85 +3.46%
ACTELION LT… ALIOF 124.80 +2.97%