Itron, Inc. (ITRI) recently announced that it has joined forces with the Water Corporation of Australia to install 13,000 smart meters across the Pilbara region of Western Australia. The installation will be carried out over the next year and is consistent with the region’s new water efficiency program, which targets to save one billion liters of water annually.
This follows the successful installation of the same system in the city of Kalgoorlie. The Pilbara region encompasses the townships of Port and South Hedland, Karratha, Roebourne, Wickham and Point Samson.
The Itron smart water meters will record and report water flow on an hourly basis. This data will facilitate Water Corporation to detect leaks and spot abnormal increases in demand. Going forward, this data will be useful to compare hourly readings on a week-by-week or month-by-month timeframe to determine usage trends and identify potential areas to target conservation. The customers will also have access to information, which will help them understand how to cut down their usage and save money.
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, City West Water, South East Water, Yarra Valley Water and Barwon Water. Itron is primarily committed to solving water providers’ supply and distribution challenges in Australia. In July this year, Itron partnered with Sydney Water to replace old meters with Itron’s high efficiency ones, which will serve the latter’s residential and commercial customers in Sydney.
Itron is restructuring its manufacturing operations to increase efficiency and lower 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, industrial, transmission and distribution customers.
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