Itron's OpenWay Riva Solution to Debut in Latin America - Analyst Blog

Itron, Inc. (ITRI) has signed a contract with a major Brazilian utility, AES Eletropaulo, to provide its OpenWay Riva solution – the first contract for the solution in Latin America. This will help the utility to improve its operations and reduce technical and non-technical losses of low voltage customers of Barueri city, Sao Paolo, Brazil.

Earlier in November, Itron had announced the integration of Itron Riva technology into its OpenWay smart grid solution. By integrating the distributed intelligence and adaptive communications of Itron Riva technology into its OpenWay smart grid solution, Itron is delivering a revolutionary communications technology along with new computing capabilities for meters and other grid devices at the edge of the network. The OpenWay Riva solution has been developed for global application with early deployments planned or in process in Asia, Europe, Africa and Latin America.

AES Eletropaulo has a customer base of 6.8 million in the state of São Paulo. The utility had broken new ground by developing an innovative communication technology as a part of its Smart Grid R&D Project, launched in Jan 2013 in Barueri. It aims to implement a redundant communication board that can embed two communication technologies – radio frequency and PLC (Power Line Carrier) in the same device, applying adaptive communications and edge computing power.

The smart communication in the meters will provide significant scope for embedded computing and support for multiple measurement communication protocols as well as other smart devices, providing better decision-making processes for the utility. The OpenWay Riva-enabled meters offer a new platform for various smart grid applications, leading intelligence to the edge of the network, including detection and analysis of power outages, transformer load management and revenue protection.

Through the smart grid project, "P&D AES Eletropaulo – Smart Grid," Itron and AES Eletropaulo will provide adaptive communication technology, deploying a single network solution that incorporates radio frequency and power line carrier in the same device. The solution dynamically selects the optimal communications path based on network operating conditions, data attributes and application requirements. AES Eletropaulo will also benefit from traditional smart metering capabilities, including remote metering, remote disconnect, diversion detection and other operational efficiencies.

The complete solution will include Itron's OpenWay Riva-enabled meters, third party electricity meters and associated software applications.  

In third-quarter 2014, Itron's adjusted earnings plunged 40% year over year to 39 cents per share impacted by higher tax rate, increased professional fees and higher variable compensation. However, earnings came ahead of the Zacks Consensus Estimate of 35 cents. Nevertheless, Itron will benefit from its consistent focus on lowering costs and capital expenditure. Moreover, a strong backlog, new contracts, flexible business operations and expansion in emerging markets are likely to drive long-term growth. However, business challenges, economic uncertainty still remain headwinds, especially in the EMEA region.

Liberty Lake, WA-based Itron Inc., along with its subsidiaries, is one of the principal technology providers to energy and water industries worldwide. It produces electricity, gas, water and heat meters, data collection and utility software solutions as well as various other associated metering products. The company provides its services to residential, commercial and industrial customers, along with transmission and distribution customers.

Itron currently carries a Zacks Rank #3 (Hold). However, some better-ranked stocks in the sector include National Instruments Corporation (NATI), Arrow Electronics, Inc. (ARW) and Advanced Semiconductor Engineering Inc. (ASX). All these stocks carry a Zacks Rank #2 (Buy).