We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Itron (ITRI) Up 8.4% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Itron (ITRI - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Itron due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Itron Q4 Earnings Beat Estimates
Itron reported fourth-quarter 2021 non-GAAP earnings of 75 cents per share, which surpassed the Zacks Consensus Estimate by 240.9%. The bottom line increased 15.4% year over year.
Revenues were $485.6 million, which lagged the Zacks Consensus Estimate of $536.5 million. Further, the top line declined 7.5% year over year.
The decline in the top line was attributed to component constraints, which offset robust customer demand. Sluggishness in the company’s Device Solutions and Networked Solutions segment was a major concern.
Product revenues were $412.7 million (85% of total revenues), down 8.6% year over year. Service revenues totaled $72.9 million (15%), down 1.2% from the year-ago quarter’s levels.
The company’s bookings were $1.1 billion and the backlog totaled $4 billion at the end of the reported quarter.
For 2021, the company reported non-GAAP earnings of $1.75, down 5.4% from 2020. Revenues were $1.982 billion, down 8.8% year over year.
Segments in Detail
Device Solutions: The company generated revenues of $157 million (32.4% of total revenues) from the segment, down 16% from the year-ago quarter.
Networked Solutions: Revenues from the segment were $265 million (54.5% of total revenues), down 5% year over year.
Outcomes: The segment generated revenues of $64 million (13.1% of total revenues), up 4% on a year-over-year basis driven by increases in software and professional services.
Operating Details
Itron’s gross margin in the fourth quarter was 25%, which contracted 330 basis points (bps) on a year-over-year basis. The downside was caused by increasing component costs and manufacturing inefficiencies.
Non-GAAP operating expenses were $127.9 million, up 21.5% year over year.
Non-GAAP operating loss was $6.6 million compared with operating income of $43.6 million reported in the year-ago quarter.
Balance Sheet & Cash Flows
As of Dec 31, 2021, cash and cash equivalents totaled $162.6 million, down from $188.7 million as of Sep 30, 2021. Accounts receivables were $298.5 million, down from $320.9 million in the prior quarter.
Long-term debt at the end of the fourth quarter stood at $450.2 million compared with $449.6 million at the end of the third quarter.
Itron generated $14 million of cash from operations in the reported quarter compared with $18.5 million in the prior quarter.
It generated a free cash flow of $7 million in the fourth quarter.
As of Feb 28, 2022, Itron has repurchased 400,000 shares worth $25 million. The company had announced a $100 million share buyback plan over 18-month period in November 2021.
Guidance
Itron expects supply chain headwinds to persist in the first half of 2022 and expects it to abate from the second half. The company expects the demand environment to remain strong in 2022.
For 2022, Itron expects revenues in the range of $2-$2.1 billion, while non-GAAP earnings is expected between $1.25 and $1.75 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -78.39% due to these changes.
VGM Scores
At this time, Itron has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Itron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Itron (ITRI) Up 8.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Itron (ITRI - Free Report) . Shares have added about 8.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Itron due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Itron Q4 Earnings Beat Estimates
Itron reported fourth-quarter 2021 non-GAAP earnings of 75 cents per share, which surpassed the Zacks Consensus Estimate by 240.9%. The bottom line increased 15.4% year over year.
Revenues were $485.6 million, which lagged the Zacks Consensus Estimate of $536.5 million. Further, the top line declined 7.5% year over year.
The decline in the top line was attributed to component constraints, which offset robust customer demand. Sluggishness in the company’s Device Solutions and Networked Solutions segment was a major concern.
Product revenues were $412.7 million (85% of total revenues), down 8.6% year over year. Service revenues totaled $72.9 million (15%), down 1.2% from the year-ago quarter’s levels.
The company’s bookings were $1.1 billion and the backlog totaled $4 billion at the end of the reported quarter.
For 2021, the company reported non-GAAP earnings of $1.75, down 5.4% from 2020. Revenues were $1.982 billion, down 8.8% year over year.
Segments in Detail
Device Solutions: The company generated revenues of $157 million (32.4% of total revenues) from the segment, down 16% from the year-ago quarter.
Networked Solutions: Revenues from the segment were $265 million (54.5% of total revenues), down 5% year over year.
Outcomes: The segment generated revenues of $64 million (13.1% of total revenues), up 4% on a year-over-year basis driven by increases in software and professional services.
Operating Details
Itron’s gross margin in the fourth quarter was 25%, which contracted 330 basis points (bps) on a year-over-year basis. The downside was caused by increasing component costs and manufacturing inefficiencies.
Non-GAAP operating expenses were $127.9 million, up 21.5% year over year.
Non-GAAP operating loss was $6.6 million compared with operating income of $43.6 million reported in the year-ago quarter.
Balance Sheet & Cash Flows
As of Dec 31, 2021, cash and cash equivalents totaled $162.6 million, down from $188.7 million as of Sep 30, 2021. Accounts receivables were $298.5 million, down from $320.9 million in the prior quarter.
Long-term debt at the end of the fourth quarter stood at $450.2 million compared with $449.6 million at the end of the third quarter.
Itron generated $14 million of cash from operations in the reported quarter compared with $18.5 million in the prior quarter.
It generated a free cash flow of $7 million in the fourth quarter.
As of Feb 28, 2022, Itron has repurchased 400,000 shares worth $25 million. The company had announced a $100 million share buyback plan over 18-month period in November 2021.
Guidance
Itron expects supply chain headwinds to persist in the first half of 2022 and expects it to abate from the second half. The company expects the demand environment to remain strong in 2022.
For 2022, Itron expects revenues in the range of $2-$2.1 billion, while non-GAAP earnings is expected between $1.25 and $1.75 per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -78.39% due to these changes.
VGM Scores
At this time, Itron has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Itron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.