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Itron (ITRI) Earnings Beat Estimates in Q3, Revenues Miss

Itron's (ITRI) third-quarter results reflect the impacts of component constraints.

This story originally appeared on Zacks

Itron, Inc. ITRI reported third-quarter 2021 non-GAAP earnings of 21 cents per share, which surpassed the Zacks Consensus Estimate by 50%.

However, the bottom line declined 65.6% year over year.

Revenues were $486.95 million, which lagged the Zacks Consensus Estimate of $524 million. Further, the top line decreased 9.9% year over year.

The decline in the top line was attributed to component constraints. Sluggishness in the company’s Device Solutions and Networked Solutions segment was another major concern.

Nevertheless, Outcomes segments performed well in the reported quarter.

Product revenues were $410.9 million (84.4% of total revenues), down 12.7% year over year. Service revenues totaled $76 million (15.6%), which increased 9.3% from the year-ago quarter.

The company’s bookings were $395 million and the backlog totaled $3.4 billion at the end of the reported quarter.

- Zacks

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 $152.2 million (31.2% of total revenues) from the segment, down 13.6% from the year-ago quarter.

Networked Solutions: Revenues from the segment were $274.5 million (56.4% of total revenues), down 10.5% year over year.

Outcomes: The segment generated revenues of $60.2 million (12.4% of total revenues), up 4.9% on a year-over-year basis.

Operating Details

For the third quarter, Itron’s gross margin was 27.7%, which expanded 120 basis points (bps) on a year-over-year basis. This was driven by a favorable product mix.

Non-GAAP operating expenses were $118.6 million, up 4.4% year over year.

Non-GAAP operating margin was 3.4%, contracting 210 bps from the year-ago quarter.

Balance Sheet & Cash Flows

As of Sep 30, 2021, cash and cash equivalents totaled $188.7 million, down from $207.1 million as of Jun 30, 2021. Accounts receivables were $320.9 million, down from $336.1 million in the prior quarter.

Long-term debt at the end of the third quarter stood at $449.6 million compared with $479.03 million at the end of the second quarter.

Itron generated $18.5 million of cash from operations in the reported quarter compared with $72.7 million in the prior quarter.

It generated a free cash flow of $11.2 million in the third quarter.

Zacks Rank & Stocks to Consider

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

Some better-ranked stocks in the broader technology sector include Advanced Micro Devices AMD, PerkinElmer PKI and Mimecast Ltd. MIME. While Advanced Micro Devices sports a Zacks Rank #1 (Strong Buy), PerkinElmer and Mimecast carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Advanced Micro Devices, PerkinElmer, and Mimecast are currently projected at 46.2%, 41.7%, and 35%, respectively.

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