Forecast Hits Itron Stock Hard

Itron Inc. shares plummeted as much as 34 percent Friday after the Spokane-based company warned investors that earnings probably won’t increase in the next two quarters.

Itron stock fell $20.25 to $34.00 with trading volume of 2.17 million shares, 21 times the three-month daily average of 100,800. Earlier in the day, the shares fell to $33, a four-and-a-half month low.

Itron shares plunged because many investors who owned the stock bet on strong growth in earnings, analysts said. Without quarter-by-quarter gains, the shares are far less attractive.

“Itron is a growth and momentum story for a lot of investors,” said Lesa Sroufe, an analyst who follows the company at Ragen MacKenzie in Seattle. Now, investors are questioning whether Itron will see the earnings growth they expected.

Before Friday’s plunge, Itron’s stock had risen almost 60 percent since the beginning of the year - compared with an 8 percent gain for the Standard & Poor’s 500 Index - even though earnings have shown little growth recently.

Wall Street had expected the company to earn about 26 cents a share in the second quarter, according to the average of five estimates from analysts surveyed by Zacks Investment Research.

Itron said Friday that second- and third-quarter earnings will match or fall below the 21 cents a share it earned in the first quarter.

The company earned 18 cents a share in the first quarter of last year, and 20 cents in both the second and third quarters.

“Our stock, like many high-technology stocks, is volatile,” said Itron Treasurer Mima Scarpelli. “The decline is not unexpected.

“We’re still extremely confident about our product.”