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Itron Partners with Sydney Water

Zacks Equity Research

Itron, Inc. (ITRI) has partnered with Australia’s largest water utility, Sydney Water, to replace old meters with Itron’s high efficiency ones. These meters will serve Sydney Water’s residential and commercial customers in Sydney.

Sydney Water supplies about 500 billion liters of water annually catering to more than 4.6 million people. The installation of the new high efficiency Itron meters will take three years and will help Sydney Water to meet rigorous national water standards.

Down under, Itron has been proactive in solving water providers’ supply and distribution challenges. Itron’s  other contracts in Australia are with the Town of Port Douglas, the City of Kalgoorlie, City West Water, South East Water, Yarra Valley Water and Barwon Water.

In February 2012, Itron was chosen by the Cairns Regional Council, under the Port Douglas Demand Management Campaign, to deploy its advanced water metering solution. This follows last year's full-scale deployment of the same system in the city of Kalgoorlie. Over the course of the six-month project, Itron is implementing a system that will help the Cairns Regional Council track water consumption and optimize supply according to demand.

Itron is restructuring its manufacturing operations for increasing efficiency and lowering manufacturing cost. Under the restructuring plans, Itron will close projects or consolidate several manufacturing facilities. The company expects annualized cost savings of $15 million in 2012; projected to grow to $30 million in 2013. However, restructuring costs will weigh on margins in 2012 and early 2013. We maintain our Neutral recommendation on Itron in conformity with the Zacks #3 Rank (short-term Hold rating) held by the stock over the near term.

Headquartered in Liberty Lake, Washington, Itron Inc. is one of the principal technology providers to the energy and water industries worldwide. It produces electricity, gas, water, and heat meters, data collection and utility software solutions along with various other associated metering products for residential, commercial and industrial and transmission and distribution) customers. It has two reportable segments: Itron North America and Itron International. Itron competes with General Electric Company (GE), Cooper Industries Ltd. (:CBE) and Badger Meter Inc. (BMI).

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