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Why Is Itron (ITRI) Down 5.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Itron (ITRI - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Itron due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Itron Q4 Earnings & Revenues Beat Estimates
Itron reported non-GAAP earnings of 71 cents per share in fourth-quarter 2022, beating the Zacks Consensus Estimate of 10 cents. The bottom line declined 5% year over year.
Revenues were $467.5 million, which beat the Zacks Consensus Estimate by 6.8%. However, the top line declined 4% (flat on a constant-currency basis) year over year.
The top-line performance was affected by the sale of the C&I gas business partly offset by higher sales in the Network Solutions and Outcomes segments.
Product revenues were $392.7 million (84% of total revenues), down 4.8% year over year.
Service revenues totaled $74.7 million (16% of total revenues), up 2.5% from the year-ago quarter’s levels.
The company’s bookings were $898 million and the backlog totaled $4.6 billion at the end of the reported quarter. The company is also undertaking extensive restructuring efforts to cut down on overhead expenses and streamline its supply chain and manufacturing operations
Segments in Detail
Device Solutions: The company generated revenues of $100 million (21.5% of total revenues) from the segment, down 36% from the year-ago quarter due to product pruning and sale of the company’s C&I gas business.
Networked Solutions: Revenues from the segment were $301 million (64.4% of total revenues), up 14% year over year, driven by ramp of new and existing deployments.
Outcomes: The segment generated revenues of $66 million (14.1% of total revenues), up 4% on a year-over-year basis due to higher software license and product sales partly offset by EMEA prepay business.
Operating Details
Itron’s gross margin in the fourth quarter was 30.1%, which expanded 510 basis points on a year-over-year basis. The uptick was caused by favorable mix partly offset by higher component costs.
Non-GAAP operating expenses were $115.5 million, down 9.7% year over year.
Non-GAAP operating income was $25.3 million against the non-GAAP operating loss of $6.6 million driven by higher gross profit and lower non-GAAP operating expenses.
Balance Sheet & Cash Flows
As of Dec 31, 2022, cash and cash equivalents totaled $202 million, down from $215.4 million as of Sep 30, 2022. Accounts receivables were $280.4 million, up from $266.7 million in the prior quarter.
As of Dec 31, 2022, net long-term debt was $452.5 million compared with $451.9 million as of Sep 30, 2022.
Itron used $13 million of cash from operations in the reported quarter against the $13.6 million of cash generated in the prior-year quarter.
The company had a free cash outflow of $17.9 million in the reported quarter against the free cash flow of $6.7 million in the prior-year quarter.
Guidance
The company expects component supply to be constrained in near term but expects supply environment to gradually start improving as the year progresses. For the first quarter, the company expects revenues to be between $460 million and $475 million.
Non-GAAP diluted earnings per share are expected in the range of 5-15 cents.
For 2023, the company expects revenues to be between $1.85 billion and $1.95 billion. Non-GAAP diluted earnings per share are expected to be between 70 cents and $1.10.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -38.1% due to these changes.
VGM Scores
Currently, Itron has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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.
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Why Is Itron (ITRI) Down 5.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Itron (ITRI - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Itron due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Itron Q4 Earnings & Revenues Beat Estimates
Itron reported non-GAAP earnings of 71 cents per share in fourth-quarter 2022, beating the Zacks Consensus Estimate of 10 cents. The bottom line declined 5% year over year.
Revenues were $467.5 million, which beat the Zacks Consensus Estimate by 6.8%. However, the top line declined 4% (flat on a constant-currency basis) year over year.
The top-line performance was affected by the sale of the C&I gas business partly offset by higher sales in the Network Solutions and Outcomes segments.
Product revenues were $392.7 million (84% of total revenues), down 4.8% year over year.
Service revenues totaled $74.7 million (16% of total revenues), up 2.5% from the year-ago quarter’s levels.
The company’s bookings were $898 million and the backlog totaled $4.6 billion at the end of the reported quarter. The company is also undertaking extensive restructuring efforts to cut down on overhead expenses and streamline its supply chain and manufacturing operations
Segments in Detail
Device Solutions: The company generated revenues of $100 million (21.5% of total revenues) from the segment, down 36% from the year-ago quarter due to product pruning and sale of the company’s C&I gas business.
Networked Solutions: Revenues from the segment were $301 million (64.4% of total revenues), up 14% year over year, driven by ramp of new and existing deployments.
Outcomes: The segment generated revenues of $66 million (14.1% of total revenues), up 4% on a year-over-year basis due to higher software license and product sales partly offset by EMEA prepay business.
Operating Details
Itron’s gross margin in the fourth quarter was 30.1%, which expanded 510 basis points on a year-over-year basis. The uptick was caused by favorable mix partly offset by higher component costs.
Non-GAAP operating expenses were $115.5 million, down 9.7% year over year.
Non-GAAP operating income was $25.3 million against the non-GAAP operating loss of $6.6 million driven by higher gross profit and lower non-GAAP operating expenses.
Balance Sheet & Cash Flows
As of Dec 31, 2022, cash and cash equivalents totaled $202 million, down from $215.4 million as of Sep 30, 2022. Accounts receivables were $280.4 million, up from $266.7 million in the prior quarter.
As of Dec 31, 2022, net long-term debt was $452.5 million compared with $451.9 million as of Sep 30, 2022.
Itron used $13 million of cash from operations in the reported quarter against the $13.6 million of cash generated in the prior-year quarter.
The company had a free cash outflow of $17.9 million in the reported quarter against the free cash flow of $6.7 million in the prior-year quarter.
Guidance
The company expects component supply to be constrained in near term but expects supply environment to gradually start improving as the year progresses. For the first quarter, the company expects revenues to be between $460 million and $475 million.
Non-GAAP diluted earnings per share are expected in the range of 5-15 cents.
For 2023, the company expects revenues to be between $1.85 billion and $1.95 billion. Non-GAAP diluted earnings per share are expected to be between 70 cents and $1.10.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -38.1% due to these changes.
VGM Scores
Currently, Itron has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. 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.