Itron reports strong Q3 earnings
Oct. 27—Strong demand for electricity and the infrastructure it needs is boosting profits at Liberty Lake-based Itron Inc.
The company reported earnings that exceeded Wall Street expectations on Tuesday for the third quarter of this year. Itron showed strong profitability on revenue of $599 million and raised profit outlook for the remainder of the year. Shares rose 7% on Tuesday, to $94.50 per share.
"Utilities' needs for capacity, reliability, resiliency and affordability continue to drive demand for our technology, while our expanding software and services portfolio is supporting recurring revenue growth," said Tom Deitrich, Itron's President and CEO in a statement.
The Liberty Lake-based company sells power metering and energy savings technology and works with companies such as Avista and other utilities across the world providing sensors, meters and software to manage power grids. It had been a promising division of Avista until it was spun off in 1993.
The company set record results last quarter, and Wall Street reacted positively to the result, with shares climbing roughly 25% in a day. Since then, shares have declined, falling roughly 17% over the quarter. The company saw strong results again this quarter, delivering a "beat and raise," which is when a company beats Wall Street expectations and raises their expectations for the rest of the year. The company beat expectations for adjusted earnings per share, a measure widely used by investors to measure the profitability of a company, by 38 cents, or about 25%.
Full-year adjusted earnings per share was raised to $6.72 to $6.82, slightly above the roughly $6.74 analysts expected.
"Not every quarter will set a record, but our performance now starts from a higher floor. We are delivering earnings leverage while continuing to invest in technology and capabilities our customers need," Deitrich said.
Deitrich was quick to reassure those on the earnings call that Itron's growth over the quarter is sustainable. Wildfire risk was also a point of the earnings call.
"This summer, the Spokane area — home to our headquarters and many of our employees — experienced devastating wildfires that destroyed hundreds of homes and forced more than 60,000 people to evacuate. Our thoughts remain with the families and communities still recovering. Events like these are why we invest in helping utilities see and act on risk before it becomes an ignition," Deitrich said.
Earlier in the month, Itron announced an expanded collaboration with Pacific Gas & Electric to deploy thousands of Itron grid-edge endpoints in high-risk areas, which mitigates the fire risk of faults, from downed live conductors, near were the electrical grid connects to power users.
Across the country, the demand for electricity is expanding, in part from the demand for power for datacenters. By providing grid intelligence and metering products, Itron provides readily available solutions that utilities can quickly bolt on to their infrastructure.
"New generation and transmission are part of the answer, but those assets take years to plan and build. In the meantime, utilities need more capacity and better performance from the infrastructure they already have. Intelligence is the fastest and least expensive capacity still available," Deitrich said.
Fourth quarter revenue estimates came in below expectations, with Itron expecting a range of $621 million to $636 million, against a consensus of about $640.8 million.
Annual recurring revenue rose 25% to $423 million, accelerating from 21% last quarter, which provides Itron with stable, and predictable revenues.
"The modernization of energy and water infrastructure is a long-term structural trend," Deitrich said during the call. "Quarterly timing may move, the underlying need will not."
Troy Slack's reporting is part of the Teen Journalism Institute.
