Itron Inc. (ITRI) engages in the technologies of intelligent metering, data collection and software solutions in the global energy and water industry. The Company serves more than 8,000 utilities worldwide, with products including, electricity, gas, water and heat meters, data collection and communication systems, including automated meter reading (AMR) and advanced metering infrastructure (AMI); meter data management and related software applications; as well as project management, installation and consulting services.

Founded in 1977, the Company is headquartered in Liberty Lake, Washington.

Source: Reuters.com, SEC Filings.

Source: Reuters.com, SEC Filings.

This is the consensus forecast for ITRI amongst 16 polled investment analysts:

Source: Financial Times

Overview

ITRI engages in the technologies of intelligent metering, data collection and software solutions in the global energy and water industry. The Company serves more than 8,000 utilities, worldwide, with products including, electricity, gas, water and heat meters, data collection and communication systems, including automated meter reading (AMR) and advanced metering infrastructure (AMI); meter data management and related software applications; as well as project management, installation and consulting services.

Market

The inevitable passage of some form of “Cap and Trade” legislation will provide investors with another government-mandated growth industry to invest risk capital. Public and private money will flow into the new “Smart Grid” in ways similar to the rush into Internet companies of the 1990s. Smart Grid companies are expected to provide tremendous revenue for the commercial participants, both large and small.

Until nuclear power and “alternative” energy sources come on-line, efficient use of the energy available through the Smart Grid is the most likely target of public and private funds. Nuclear power, wind farms, widespread photovoltaic panels and other sources of energy take many years to implement, leaving most of the present growth in these technologies within the government, utilities and a handful of commercial sectors.

The Smart Grid is a system that adapts the present electrical infrastructure to achieve better efficiency, adaptability and multi-source usability. Through the next two decades, utilities will invest hundreds of billions of dollars in infrastructure Smart Grid upgrades, including computers, sensors and networking systems and devices.

The major providers to the Smart Grid will most likely come from General Electric, Siemens, Cisco Systems, Oracle, among other large-capitalized enterprises. Moreover, smaller companies providing leading-edge technologies also will most likely attract significant investor funds looking for “pure” plays.

Company

ITRI specializes in making meters and develops technologies for the “Smart meter,” which will be installed in the home, keeping track of the watts used from the Smart Grid. At $300 per meter, the Company expects lots of orders. Southern California Edison said it expects to invest over the next four years more than $1.7 billion to equip approximately 5.3 million homes with the new meter made by ITRI.

Analysts believe the Company will be a major competitor in the Smart meter space, with the chance of being bought by General Electric or another bigger competitor.

For the second quarter, the Company posted net income of $15.3 million, or 40 cents per share, on a 19% decline in revenue of $413.7 million, compared with net income of $11.1 million, or 31 cents per share. Analysts polled by Thomson Reuters expected the Company to earn 47 cents per share (before special items) on revenue of $402.1 million.

The Company said in its 10-Q that it was negatively impacted by the global recession, technology shifts away from its core business of automated meter reading (AMR) systems to advanced metering infrastructure systems, foreign exchange volatility, and delays stemming from stimulus funding of some projects through the American Recovery and Reinvestment Act of 2009.

The Company is strengthening its financial position by reducing borrowings and issuing $286 million in common stock as a conservative operations strategy until the world economy clearly regains its footing.

On July 17, the Company reduced its borrowing by repaying the balance of $110 million of its senior subordinate notes.

Source: http://stockcharts.com/h-sc/ui?s=itri

ITRI trades above its 13-day moving average. This bullish sign is significant because the moving average is also positively trending.

The MACD for ITRI currently indicates a bullish signal. The MACD is above the signal line, a 9-day moving average; and the MACD is also above the critical level of 0, which implies that the underlying moving averages are trending higher. Overall, the graph is bullish, as the price recently broke-out of its trend line highs formed since late June. However, the stock has rallied into an extended overbought condition.

Source: Thomson Financial

Data provided by Thomson Financial

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