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Itron (ITRI) Q1 Earnings Beat Estimates, Revenues Dip Y/Y

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Itron Inc. ITRI reported first-quarter 2022 non-GAAP earnings of 11 cents per share, which surpassed the Zacks Consensus Estimate by 22.2%. The bottom line decreased 78.9% year over year.

Revenues were $475.3 million, which lagged the Zacks Consensus Estimate by 1.8%. Further, the top line declined 9% year over year.

The decline in the top line was attributed to component constraints, which offset robust customer demand. Sluggishness in the company’s Device Solutions and Networked Solutions segment was a major concern.

Product revenues were $399.8 million (84.1% of total revenues), down 9.7% year over year. Service revenues totaled $75.5 million (15.9%), down 1.6% from the year-ago quarter’s levels.

The company’s bookings were $417 million and the backlog totaled $3.9 billion at the end of the reported quarter.

Itron, Inc. Price, Consensus and EPS Surprise

Itron, Inc. Price, Consensus and EPS Surprise
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 $140 million (29.4% of the total revenues) from the segment, down 19% from the year-ago quarter.

Networked Solutions: Revenues from the segment were $279 million (58.6% of the total revenues), down 3% year over year.

Outcomes: The segment generated revenues of $57 million (12% of the total revenues), down 3% on a year-over-year basis, driven by decreased product and software license sales.

Operating Details

Itron’s gross margin in the first quarter was 28.4%, which contracted 380 basis points (bps) on a year-over-year basis. The downside was caused by increasing component costs and manufacturing inefficiencies.

Non-GAAP operating expenses were $126 million, down 1.7% year over year due to lower product development expenses.

Non-GAAP operating income was $9.3 million, down 76% year over year. Operating income was $6.8 million, declining 78% from the year-ago quarter.
Non-GAAP operating margin in the first quarter was 2%, which contracted 550 bps on a year-over-year basis.

Balance Sheet & Cash Flows

As of Mar 31, 2022, cash and cash equivalents totaled $203.9 million, up from $162.5 million as of Dec 31, 2021. Accounts receivables were $303.2 million, up from $298.5 million in the prior quarter.

Long-term debt at the end of the first quarter stood at $450.8 million compared with $450.2 million at the end of the quarter ended Dec 31, 2021.

Itron generated $7.6 million of cash from operations in the reported quarter compared with $50 million in the prior quarter.

It generated a free cash flow of $2.2 million in the reported quarter compared with $38.5 million in the prior quarter.

Zacks Rank & Stocks to Consider

Currently, Itron has a Zacks Rank #5 (Strong Sell).

Some better-ranked companies from the broader technology sector are Pure Storage PSTG, Jabil JBL and Celestica CLS. Pure Storage and Jabil currently sport a Zacks Rank #1 (Strong Buy), whereas Celestica carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Pure Storage’s fiscal 2023 earnings is pegged at 86 cents per share, rising 22.9% in the past 60 days. The long-term earnings growth rate is expected to be 30.9%.

Pure Storage’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average being 99.2%. Shares of Pure Storage have risen 52.2% in the past year.

The Zacks Consensus Estimate for Jabil’s fiscal 2022 earnings is pegged at $7.25 per share, rising 10.2% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.

Jabil’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average being 13.5%. Shares of Jabil have grown 10.5% in the past year.

The Zacks Consensus Estimate for Celestica’s 2022 earnings is pegged at $1.68 per share, rising 4.3% in the past 60 days. The long-term earnings growth rate is expected to be 14.5%.

Celestica’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average being 12.6%. Shares of Celestica have risen 29.2% in the past year.


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