Itron Inc (ITRI - Free Report) reported non-GAAP earnings of 98 cents per share in third-quarter 2023, surpassing the Zacks Consensus Estimate by 92.2%. The company reported earnings of 23 cents in the prior-year quarter.
Revenues were $561 million, which beat the Zacks Consensus Estimate by 3.7%. The top line improved 33% year over year.
The top-line performance was driven by strong operational execution and easing of supply-chain issues.
Product revenues were $480.4 million (86% of total revenues), up 38.1% year over year. Service revenues totaled $80.4 million (14%), up 10% from the year-ago levels.
Itron’s bookings were $413 million and backlog amounted to $4.3 billion at the end of the reported quarter.
Segments in Detail
Device Solutions: Revenues generated from this segment were $111 million (19.8% of total revenues), up 18% from the year-ago quarter due to higher demand for water meter sales. Our estimate was pegged at $112.5 million.
Networked Solutions: Segmental revenues totaled $385 million (68.7%), up 43% year over year, driven by easing of supply-chain issues. We suggested the metric to be $361.4 million.
Outcomes: The segment’s revenues of $65 million (11.6%) improved 14% on a year-over-year basis due to higher recurring services revenues. Our projection was $67.2 million.
Operating Details
Itron’s gross margin in the third quarter was 33.4%, which expanded 490 basis points on a year-over-year basis. Favorable mix and operational efficiency resulted in the uptick.
Non-GAAP operating expenses of $128.2 million jumped 21.8% year over year primarily due to higher labor costs including variable compensation.
Non-GAAP operating income was $59 million compared with $14.8 million in the year-ago period. The upside was driven by higher gross profit and revenues.
Balance Sheet & Cash Flows
As of Sep 30, cash and cash equivalents totaled $254.8 million, up from $232.8 million as of Jun 30, 2023. Accounts receivables were $318.1 million compared with $318.8 million in the prior quarter.
As of Sep 30, net long-term debt was $454.3 million compared with $453.7 million as of Jun 30, 2023.
Itron generated $34.1 million of cash from operations in the reported quarter compared with $14.9 million in the prior-year quarter.
Free cash flow was $28.3 million compared with $10.7 million in a year ago.
Guidance
For the fourth quarter, ITRI expects revenues to be between $565 million and $575 million.
Non-GAAP earnings per share are anticipated in the range of 70-80 cents.
For 2023, management now projects revenues to be between $2.16 billion and $2.17 billion (earlier view: $2.11 billion and $2.14 billion). Non-GAAP earnings per share are estimated in the $2.83-$2.93 band (prior projection: $2.03-$2.28).
Currently, Itron sports a Zacks Rank #1 (Strong Buy).
Other Key Picks
Some better-ranked stocks worth consideration in the broader technology space are Asure Software (ASUR - Free Report) , Synopsys (SNPS - Free Report) and VMware . While Asure Software flaunts a Zacks Rank #1, VMware and Synopsys carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 676.4%. Shares of ASUR have climbed 26.6% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has remained flat in the past 60 days at $11.09. SNPS’ long-term earnings growth rate is 16.7%. Shares of SNPS have surged 73.1% in the past year.
The Zacks Consensus Estimate for VMware’s fiscal 2024 EPS has improved 1% in the past 60 days to $7.23.
VMware’s earnings outpaced the Zacks Consensus Estimate in two of the last four quarters while missing twice. The average earnings surprise is 1.2%. Shares of VMW have jumped 30.7% in the past year.
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Itron Inc (ITRI - Free Report) reported non-GAAP earnings of 98 cents per share in third-quarter 2023, surpassing the Zacks Consensus Estimate by 92.2%. The company reported earnings of 23 cents in the prior-year quarter.
Revenues were $561 million, which beat the Zacks Consensus Estimate by 3.7%. The top line improved 33% year over year.
The top-line performance was driven by strong operational execution and easing of supply-chain issues.
Product revenues were $480.4 million (86% of total revenues), up 38.1% year over year. Service revenues totaled $80.4 million (14%), up 10% from the year-ago levels.
Itron’s bookings were $413 million and backlog amounted to $4.3 billion at the end of the reported quarter.
Segments in Detail
Device Solutions: Revenues generated from this segment were $111 million (19.8% of total revenues), up 18% from the year-ago quarter due to higher demand for water meter sales. Our estimate was pegged at $112.5 million.
Networked Solutions: Segmental revenues totaled $385 million (68.7%), up 43% year over year, driven by easing of supply-chain issues. We suggested the metric to be $361.4 million.
Outcomes: The segment’s revenues of $65 million (11.6%) improved 14% on a year-over-year basis due to higher recurring services revenues. Our projection was $67.2 million.
Operating Details
Itron’s gross margin in the third quarter was 33.4%, which expanded 490 basis points on a year-over-year basis. Favorable mix and operational efficiency resulted in the uptick.
Non-GAAP operating expenses of $128.2 million jumped 21.8% year over year primarily due to higher labor costs including variable compensation.
Non-GAAP operating income was $59 million compared with $14.8 million in the year-ago period. The upside was driven by higher gross profit and revenues.
Balance Sheet & Cash Flows
As of Sep 30, cash and cash equivalents totaled $254.8 million, up from $232.8 million as of Jun 30, 2023. Accounts receivables were $318.1 million compared with $318.8 million in the prior quarter.
As of Sep 30, net long-term debt was $454.3 million compared with $453.7 million as of Jun 30, 2023.
Itron generated $34.1 million of cash from operations in the reported quarter compared with $14.9 million in the prior-year quarter.
Free cash flow was $28.3 million compared with $10.7 million in a year ago.
Guidance
For the fourth quarter, ITRI expects revenues to be between $565 million and $575 million.
Non-GAAP earnings per share are anticipated in the range of 70-80 cents.
For 2023, management now projects revenues to be between $2.16 billion and $2.17 billion (earlier view: $2.11 billion and $2.14 billion). Non-GAAP earnings per share are estimated in the $2.83-$2.93 band (prior projection: $2.03-$2.28).
Currently, Itron sports a Zacks Rank #1 (Strong Buy).
Other Key Picks
Some better-ranked stocks worth consideration in the broader technology space are Asure Software (ASUR - Free Report) , Synopsys (SNPS - Free Report) and VMware . While Asure Software flaunts a Zacks Rank #1, VMware and Synopsys carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 676.4%. Shares of ASUR have climbed 26.6% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has remained flat in the past 60 days at $11.09. SNPS’ long-term earnings growth rate is 16.7%. Shares of SNPS have surged 73.1% in the past year.
The Zacks Consensus Estimate for VMware’s fiscal 2024 EPS has improved 1% in the past 60 days to $7.23.
VMware’s earnings outpaced the Zacks Consensus Estimate in two of the last four quarters while missing twice. The average earnings surprise is 1.2%. Shares of VMW have jumped 30.7% in the past year.
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
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