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

Zacks Equity Research
·3-min read

Itron, Inc. ITRI reported first-quarter 2021 non-GAAP earnings of 52 cents per share, which beat the Zacks Consensus Estimate by 30%. However, the figure declined 8.8% from the year-ago quarter and 20% from the previous quarter.

Revenues were $519.6 million, which lagged the Zacks Consensus Estimate of $536.2 million. Further, the top line decreased 1.1% sequentially and 13% year over year.

The decline in the top line was attributed to the negative impacts of the pandemic on the timing of customer projects. Moreover, the weak performances of Device Solutions and Networked Solutions were concerning.

Notably, product revenues were $442.8 million (85.2% of total revenues), down 16.2% year over year. Service revenues totaled $76.8 million (14.8%), which increased 9.2% from the year-ago quarter.

The company’s bookings were $688 million and the backlog totaled $3.4 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 $172.8 million (33.2% of total revenues) from the segment, down 15% from the year-ago quarter.

Networked Solutions: Revenues from the segment were $288.3 million (55.5% of total revenues), down 15% year over year.

Outcomes: The segment generated revenues of $58.5 million (11.3% of total revenues), up 6% on a year-over-year basis.

Operating Details

For the first quarter, Itron’s gross margin was 32.2%, which expanded 350 basis points (bps) on a year-over-year basis. This was driven by operational efficiency and a favorable product mix.

Non-GAAP operating expenses were $128.1 million, down 3.7% year over year.

Further, non-GAAP operating margin was 7.5%, expanding 110 bps from the year-ago quarter.

Balance Sheet & Cash Flows

As of Mar 31, 2021, cash and cash equivalents totaled $574.6 million, up from $206.9 million as of Dec 31, 2020. Accounts receivables were $365.8 million, down from $369.8 million in the prior quarter.

Long-term debt at the end of the first quarter stood at $496.5 million compared with $902.6 million at the end of the fourth quarter of 2020.

Itron generated $49.9 million of cash from operations in the first quarter compared with $38.9 million in the prior quarter.

Moreover, it generated a free cash flow of $39 million in the quarter under review compared with 29.03 million in the last reported quarter.

2021 Guidance

For 2021, the company changed non-GAAP earnings guidance from $2.15-$2.55 per share to $2.30-$2.70. The consensus mark for the same is pegged at $2.40 per share.

Zacks Rank & Other Key Picks

Itron currently has a Zacks Rank #2 (Buy).

Some better-ranked stocks in the broader technology sector are Qorvo QRVO, Microchip MCHP and Synaptics SYNA. All the stocks carry a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate of Microchip, Qorvo, and Synaptics is pegged at 15.47%, 13.99% and 10%, respectively.

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