Itron (ITRI) Q3 Earnings & Revenues Beat Estimates, Rise Y/Y
Itron Inc ITRI reported non-GAAP earnings of 98 cents per share in third-quarter 2023, surpassing the Zacks Consensus Estimate by 92.2%. The company reported earnings of 23 cents in the prior-year quarter.
Revenues were $561 million, which beat the Zacks Consensus Estimate by 3.7%. The top line improved 33% year over year.
The top-line performance was driven by strong operational execution and easing of supply-chain issues.
Product revenues were $480.4 million (86% of total revenues), up 38.1% year over year. Service revenues totaled $80.4 million (14%), up 10% from the year-ago levels.
Itron, Inc. Price, Consensus and EPS Surprise
Itron, Inc. price-consensus-eps-surprise-chart | Itron, Inc. Quote
Itron’s bookings were $413 million and backlog amounted to $4.3 billion at the end of the reported quarter.
Segments in Detail
Device Solutions: Revenues generated from this segment were $111 million (19.8% of total revenues), up 18% from the year-ago quarter due to higher demand for water meter sales. Our estimate was pegged at $112.5 million.
Networked Solutions: Segmental revenues totaled $385 million (68.7%), up 43% year over year, driven by easing of supply-chain issues. We suggested the metric to be $361.4 million.
Outcomes: The segment’s revenues of $65 million (11.6%) improved 14% on a year-over-year basis due to higher recurring services revenues. Our projection was $67.2 million.
Operating Details
Itron’s gross margin in the third quarter was 33.4%, which expanded 490 basis points on a year-over-year basis. Favorable mix and operational efficiency resulted in the uptick.
Non-GAAP operating expenses of $128.2 million jumped 21.8% year over year primarily due to higher labor costs including variable compensation.
Non-GAAP operating income was $59 million compared with $14.8 million in the year-ago period. The upside was driven by higher gross profit and revenues.
Balance Sheet & Cash Flows
As of Sep 30, cash and cash equivalents totaled $254.8 million, up from $232.8 million as of Jun 30, 2023. Accounts receivables were $318.1 million compared with $318.8 million in the prior quarter.
As of Sep 30, net long-term debt was $454.3 million compared with $453.7 million as of Jun 30, 2023.
Itron generated $34.1 million of cash from operations in the reported quarter compared with $14.9 million in the prior-year quarter.
Free cash flow was $28.3 million compared with $10.7 million in a year ago.
Guidance
For the fourth quarter, ITRI expects revenues to be between $565 million and $575 million.
Non-GAAP earnings per share are anticipated in the range of 70-80 cents.
For 2023, management now projects revenues to be between $2.16 billion and $2.17 billion (earlier view: $2.11 billion and $2.14 billion). Non-GAAP earnings per share are estimated in the $2.83-$2.93 band (prior projection: $2.03-$2.28).
Currently, Itron sports a Zacks Rank #1 (Strong Buy).
Other Key Picks
Some better-ranked stocks worth consideration in the broader technology space are Asure Software ASUR, Synopsys SNPS and VMware VMW. While Asure Software flaunts a Zacks Rank #1, VMware and Synopsys carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 5.9% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 676.4%. Shares of ASUR have climbed 26.6% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has remained flat in the past 60 days at $11.09. SNPS’ long-term earnings growth rate is 16.7%. Shares of SNPS have surged 73.1% in the past year.
The Zacks Consensus Estimate for VMware’s fiscal 2024 EPS has improved 1% in the past 60 days to $7.23.
VMware’s earnings outpaced the Zacks Consensus Estimate in two of the last four quarters while missing twice. The average earnings surprise is 1.2%. Shares of VMW have jumped 30.7% in the past year.
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