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Itron (ITRI) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
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Itron, Inc. (ITRI - Free Report) reported third-quarter 2020 non-GAAP earnings of 61 cents per share, which beat the Zacks Consensus Estimate by 165.2%. Further, the figure improved significantly from 3 cents per share in the previous quarter.
However, the bottom line declined 41.3% from the year-ago quarter due to adverse effects of coronavirus pandemic on the company’s business.
Revenues were $540.2 million, which lagged the Zacks Consensus Estimate of $548 million. Further, the top line increased 6% sequentially but fell 13.5% year over year.
Sluggishness in the demand environment due to ongoing coronavirus pandemic led to year-over-year decline in the top line. Moreover, weak performance of Device Solutions and Networked Solutions was a negative.
Further, operational constraints as a result of COVID-19-led disruptions were headwinds.
Notably, product revenues were $470.7 million (87.1% of total revenues), down 14.9% year over year. Service revenues totaled $69.5 million (12.9%), which decreased 2.9% from the year-ago quarter.
The company’s bookings were $432 million and the backlog totaled $2.8 billion at the end of the reported quarter.
Uncertainties related to COVID-19 are likely to act as headwinds in the days ahead.
Nevertheless, stability in supply chain and logistics remain positive.
Device Solutions: The company generated revenues of $176.1 million (32.6% of total revenues) from this segment, down 17% from the year-ago quarter.
Networked Solutions: Revenues from this segment were $306.7 million (56.8% of total revenues), down 14% year over year.
Outcomes: This segment generated revenues of $57.4 million (10.6% of total revenues), up 5% on a year-over-year basis.
Operating Details
For the third quarter, Itron’s gross margin was 26.5%, which contracted 500 basis points (bps) on a year-over-year basis primarily due to manufacturing inefficiencies stemming from the COVID-19 pandemic.
Non-GAAP operating expenses were $113.5 million, down 12.9% year over year. This increase resulted from rising product development investment. As a percentage of revenues, the figure expanded 300 bps year over year to 23.2%.
Further, non-GAAP operating margin came in 5.5%, contracting 510 bps from the year-ago quarter.
Balance Sheet & Cash Flows
As of Sep 30, 2020, cash and cash equivalents totaled $586.2 million, up from $544.8 million as of Jun 30, 2020. Accounts receivables were $386.9 million, down from $411.2 million in the prior quarter.
Long-term debt at the end of the third quarter stood at $1.31 billion compared with $1.32 billion at the end of the second quarter.
Itron generated $45 million of cash from operations in the third quarter compared with $6.9 million million in the prior quarter.
Moreover, the company generated free cash flow $38 million against ($9.6 million) in the last quarter.
Both Marchex and Qorvo are scheduled to release earnings on Nov 4, while NVIDIA is slated to report on Nov 18.
Long-term earnings growth rate of Qorvo, Marchex, and NVIDIA is pegged at 12.35%, 15% and 20.07%, respectively.
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Itron (ITRI) Q3 Earnings Beat Estimates, Revenues Fall Y/Y
Itron, Inc. (ITRI - Free Report) reported third-quarter 2020 non-GAAP earnings of 61 cents per share, which beat the Zacks Consensus Estimate by 165.2%. Further, the figure improved significantly from 3 cents per share in the previous quarter.
However, the bottom line declined 41.3% from the year-ago quarter due to adverse effects of coronavirus pandemic on the company’s business.
Revenues were $540.2 million, which lagged the Zacks Consensus Estimate of $548 million. Further, the top line increased 6% sequentially but fell 13.5% year over year.
Sluggishness in the demand environment due to ongoing coronavirus pandemic led to year-over-year decline in the top line. Moreover, weak performance of Device Solutions and Networked Solutions was a negative.
Further, operational constraints as a result of COVID-19-led disruptions were headwinds.
Notably, product revenues were $470.7 million (87.1% of total revenues), down 14.9% year over year. Service revenues totaled $69.5 million (12.9%), which decreased 2.9% from the year-ago quarter.
The company’s bookings were $432 million and the backlog totaled $2.8 billion at the end of the reported quarter.
Uncertainties related to COVID-19 are likely to act as headwinds in the days ahead.
Nevertheless, stability in supply chain and logistics remain positive.
Itron, Inc. Price, Consensus and EPS Surprise
Itron, Inc. price-consensus-eps-surprise-chart | Itron, Inc. Quote
Segments in Detail
Device Solutions: The company generated revenues of $176.1 million (32.6% of total revenues) from this segment, down 17% from the year-ago quarter.
Networked Solutions: Revenues from this segment were $306.7 million (56.8% of total revenues), down 14% year over year.
Outcomes: This segment generated revenues of $57.4 million (10.6% of total revenues), up 5% on a year-over-year basis.
Operating Details
For the third quarter, Itron’s gross margin was 26.5%, which contracted 500 basis points (bps) on a year-over-year basis primarily due to manufacturing inefficiencies stemming from the COVID-19 pandemic.
Non-GAAP operating expenses were $113.5 million, down 12.9% year over year. This increase resulted from rising product development investment. As a percentage of revenues, the figure expanded 300 bps year over year to 23.2%.
Further, non-GAAP operating margin came in 5.5%, contracting 510 bps from the year-ago quarter.
Balance Sheet & Cash Flows
As of Sep 30, 2020, cash and cash equivalents totaled $586.2 million, up from $544.8 million as of Jun 30, 2020. Accounts receivables were $386.9 million, down from $411.2 million in the prior quarter.
Long-term debt at the end of the third quarter stood at $1.31 billion compared with $1.32 billion at the end of the second quarter.
Itron generated $45 million of cash from operations in the third quarter compared with $6.9 million million in the prior quarter.
Moreover, the company generated free cash flow $38 million against ($9.6 million) in the last quarter.
Zacks Rank & Key Picks
Itron currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Qorvo (QRVO - Free Report) , Marchex (MCHX - Free Report) and NVIDIA Corporation (NVDA - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Both Marchex and Qorvo are scheduled to release earnings on Nov 4, while NVIDIA is slated to report on Nov 18.
Long-term earnings growth rate of Qorvo, Marchex, and NVIDIA is pegged at 12.35%, 15% and 20.07%, respectively.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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