Itron (ITRI) Tops Q2 Earnings And Revenues, Guides 2016
Zacks Investment Research | Sep 05, 2016 07:48AM ET
Shares of Itron, Inc. (NASDAQ:ITRI) gained roughly 4.8% to close at $53.39 on Friday after the company posted upbeat second-quarter 2016 results. The company reported adjusted earnings of 65 cents per share, as against a loss of 39 cents a share recorded in the year-ago quarter. Earnings per share surpassed the Zacks Consensus Estimate of 40 cents.
Including one-time items, the company reported earnings of 52 cents per share as against a loss of 37 cents per share in the year-ago quarter.
Operational Update
Total revenue jumped 9% to $513 million from $470.8 million in second-quarter 2015. Revenues also surpassed the Zacks Consensus Estimate of $469 million. Foreign currency exchange rates had an unfavorable impact of around $7 million on revenues. Excluding the foreign currency impact, revenues were up 10% year over year, driven primarily by growth in all segments, particularly in the Electricity and Gas segments.
Cost of goods sold dropped 2.6% to $343 million from $352 million in the prior-year quarter. Gross profit increased 43% year over year to $169.7 million. Gross margin expanded 800 basis points to 33%, driven by lower warranty expense, favorable product mix and operational efficiencies.
Adjusted operating expenses increased 3.7% year over year to $128 million, due to higher general and administrative costs for professional fees associated with the review of software-related revenue recognition and revision of previously issued financial statements. Itron posted adjusted operating income of $41.6 million against a loss of $4.9 million in the year-ago quarter, supported by the robust performance in revenue and gross margin.
Segment Performance
Electricity Segment: Net sales at the Electricity segment escalated 14% year over year to $232.8 million in second-quarter 2016. The segment reported adjusted operating income of $23 million that surged significantly from $1.1 million in the year-ago quarter.
Gas Segment: The segment’s sales rose 7.9% year over year to $150.3 million. Adjusted operating income was $27 million, marking a 75.9% year-over-year surge.
Water Segment: The Water segment reported sales of $129.9 million, up 2.2% from $127 million in the prior-year quarter. The segment reported adjusted operating profit of $15.7 million, reversing from a loss of $9.9 million posted in the year-ago quarter.
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Financial Position
Itron ended the quarter with cash and cash equivalents of $132 million compared with $131 million as of 2015 end. The company generated cash flow from operations of $51.1 million for the six-month period ended Jun 30, 2016 compared with $17.6 million in the comparable year-ago period.
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