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The Board of Itron, Inc. (ITRI - Analyst Report) has sanctioned a new share repurchase program of up to $50 million. Itron intends to complete the share repurchase program during the next twelve months through the open market or negotiated transactions.

The repurchase program, effective immediately, is in line with Itron’s commitment to return wealth to shareholders and reflects its long-term growth potential and strong financial profile. In Feb 2013, Itron completed the previous share repurchase program of 2 million shares for $77 million.

In February 2013, Itron reported adjusted earnings per share of $3.62 in 2012 compared with $4.19 in 2011. Adjusted earnings lagged the Zacks Consensus Estimate of $2.38 per share. Total revenue during the year fell 10.5% to $2.178 billion.

Itron had cash and cash equivalents of $136.4 million in 2012 compared with $133 million in 2011. Cash from operations decreased to $205 million in 2012 from $252 million in the prior year. The debt-to-capitalization ratio improved to 29.6% from 33.3% in 2011. The company has initiated revenue guidance in the range of $2.0 billion to $2.1 billion and adjusted EPS guidance of $3.00-$3.25 for 2013.

Our View

Restructuring program of Itron’s manufacturing operations comprising project closure, consolidation of several manufacturing facilities and curtailment of global workforce will have positive impact on earnings. Concurrently, the acquisition of SmartSynch will enable Itron to strengthen its position in the integrated cellular network market and provide the customers with wider choice across the spectrum of smart metering although, the completion of the OpenWay projects is expected to impact revenues negatively in the next few quarters.

Liberty Lake, Wash-based Itron Inc. 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. Itron’s peers in the same industry are National Instruments Corporation (NATI - Snapshot Report), Agilent Technologies Inc. (A - Analyst Report) and Ametek Inc. (AME - Analyst Report).

Itron currently retains a Zacks Rank #5 (Strong Sell).

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