Itron, Inc. ( ITRI Quick Quote ITRI - Free Report) reported second-quarter 2021 non-GAAP earnings of 28 cents per share, which surged significantly from 3 cents per share in the year-ago quarter. However, the figure declined 46.1% sequentially and missed the Zacks Consensus Estimate by 44%. Revenues were $489.4 million, which lagged the Zacks Consensus Estimate of $547.4 million. Further, the top line decreased 5.8% sequentially and 4% year over year. The decline in the top line was attributed to component constraints. The sluggishness in its Networked Solutions segment was another concern. Nevertheless, the company witnessed a recovery in demand. Device Solutions and Outcomes segments also performed well. Product revenues were $411.7 million (84.1% of total revenues), down 6.2% year over year. Service revenues totaled $77.7 million (15.9%), which increased 10% from the year-ago quarter. The company’s bookings were $596 million and the backlog totaled $3.5 billion at the end of the reported quarter. Segments in Detail Device Solutions: The company generated revenues of $162.9 million (33.3% of total revenues) from the segment, up 26% from the year-ago quarter. Networked Solutions: Revenues from the segment were $265.1 million (54.2% of total revenues), down 18% year over year. Outcomes: The segment generated revenues of $61.4 million (12.5% of total revenues), up 10% on a year-over-year basis. Operating Details
For the second quarter, Itron’s gross margin was 30.6%, which expanded 340 basis points (bps) on a year-over-year basis. This was driven by an improvement in manufacturing efficiencies and a favorable product mix.
Non-GAAP operating expenses were $123.02 million, up 4.1% year over year. Non-GAAP operating margin was 5.5%, expanding 150 bps from the year-ago quarter. Balance Sheet & Cash Flows
As of Jun 30, 2021, cash and cash equivalents totaled $207.1 million, down from $574.6 million as of Mar 31, 2021. Accounts receivables were $336.1 million, down from $365.8 million in the prior quarter.
Long-term debt at the end of the second quarter stood at $479.03 million compared with $496.5 million at the end of the first quarter. Itron generated $72.7 million of cash from operations in the second quarter compared with $49.9 million in the prior quarter. It generated a free cash flow of $63.7 million in the quarter under review compared with $39 million in the last reported quarter. 2021 Guidance
For 2021, the company revised down the non-GAAP earnings guidance from $2.30-$2.70 per share to $1.00-$1.50 per share. The Zacks Consensus Estimate for the same is pegged at $2.42.
Itron lowered the revenue guidance from $2.23-$2.33 billion to $2.05-$2.15 billion. The consensus mark for the same is pegged at $2.26 billion. The company’s 2021 guidance assumes the negative impacts of component constraints. Zacks Rank & Stocks to Consider
Currently, Itron has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader technology sector are Carrier Global Corporation ( CARR Quick Quote CARR - Free Report) , Ametek ( AME Quick Quote AME - Free Report) and Agilent Technologies ( A Quick Quote A - Free Report) . All companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Long-term earnings growth rates for Carrier, Ametek and Agilent are currently projected at 14.5%, 10.2% and 13%, respectively.