Itron Announces Solid Q2 Results, Plans To Become Leaner

Cowen’s Jeffrey Osborne mentioned that Itron, Inc. ITRI reported robust quarterly results, reflecting margin expansion and top-line growth.

Osborne maintains a Market Perform rating on the company, while raising the price target from $45 to $50.

“The company announced a restructuring plan that is expected to save $40 million annually by the end of 2018, featuring workforce reductions and facilities consolidation. We view the plans to build a leaner company as positive,” the analyst stated.

Strong Quarter

The company reported delayed results for the second quarter, with the revenue beating the estimate and the consensus at $513 million.

Related Link: Itron Sees FY16 Non-GAAP EPS $2.20–2.45 Revenue $1.95 Billion–2 Billion

Gross margins rose to 33.1 percent from 25.2 percent in the previous quarter, driven by a favorable product mix and operational efficiencies.

Operating income, excluding Intangibles, came in ahead of the estimate at $41.6 million, while bookings came in at $349 million.

Itron reported its diluted EPS at $0.52, ahead of expectations, while total back at the end of the quarter stood at $1.3 billion with another $300 million in customer commitments that were not yet in backlog.

Restructuring

In addition, the company “announced its plans for restructuring that will include reducing the workforce, and consolidating or closing facilities and should be completed by the end of 2018 that would result in annual savings of ~$40 million,” Osborne stated.

Itron also mentioned it was witnessing muted activity in the EMEA region, as compared to strength in the United States.

Management guided to revenue of $1.95–$2.00 billion and EPS of $2.20–$2.45.

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