Itron, Inc. ITRI has signed a long-term contract with Questar Gas, a unit of Questar Corporation STR, to upgrade its automated gas metering system. This contract was included in Itron’s bookings in fourth-quarter 2015.
Questar Gas is a natural gas distribution service provider to nearly 1 million customers in Utah, southwestern Wyoming and southeastern Idaho. Per the contract, the utility will initially install 650,000 Itron gas communication modules to improve its operational efficiency as well as customer service.
Itron’s gas automation solution will allow Questar Gas to continue collecting meter reads remotely with mobile data collection technology, streamlining meter reading and improving billing accuracy and reliability. Additionally, Questar Gas will obtain better visibility into utility operations which will help increase efficiencies and cut costs.
Itron had bookings of $822 million in the fourth quarter of 2015. Bookings were solid in the quarter with a 1.7 to 1 book to bill ratio, the highest since 2007. Strong backlog performance depicts a healthy level of utility and municipal spending on smart systems and analytics, along with growing customer demand in Itron’s all three end markets – Electricity, Gas and Water.
Further, several upcoming projects will help increase its backlog visibility for 2016. The company reported total backlog of $1.55 billion in 2015, up 4% year over year. These factors will drive revenue growth this year and beyond.
Moreover, significant backlog growth, benefits from restructuring and efficiency projects, and the Itron OpenWay Riva next generation platform are expected to drive revenues, leading to improved profitability in 2016.
Itron’s shares edged down around 0.4% to close at $41.88 on Tuesday.
Currently, Itron carries a Zacks Rank #3 (Hold).
A couple of better-ranked stocks in the same sector are Teradyne Inc. TER and Taiwan Semiconductor Manufacturing Company Limited TSM, both sporting a Zacks Rank #1 (Strong Buy).
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