Itron Stock Tumbles 28 Percent Projected Loss For Third Quarter Sparks Massive Sell-Off

Itron Inc. stock plunged Wednesday after the Spokane company said it likely will lose money in the third quarter.

The price of a share fell $8 to $21 - a 28 percent drop - on volume of 827,000. That’s 10 times the normal trading activity.

The dive was the second for the stock since April, when the price peaked at $60 per share.

The earlier slide also was triggered by announcing an anticipated weakening of earnings.

On Wednesday, the company attributed the probable loss to a slowdown in the placement of new orders for its automatic meter-reading equipment and the stretching out of shipments of existing orders.

Itron also is making significant investments to develop fixed-network equipment that will allow operators to read meters and perform other tasks from a centralized location.

Analysts polled by IBES International had expected Itron to earn 18 cents a share in the third quarter.

President Johnny Humphreys said Itron’s business, with the exception of the fixed-network segment, remains profitable.

Fixed-network products should become profitable in 1998, he said.

“We believe the market slowdown is temporary as market forces will increasingly compel utilities to become more efficient,” Humphreys said.

“The announcement of a quarterly loss after 17 consecutive quarters of positive earnings is not unimportant, but does not reflect a change in the business fundamentals upon which Itron is based,” he said.

Treasurer Mima Scarpelli said the last-minute placement of one or two orders could turn quarterly results around. But even if Itron reports a loss for the three-month period, she said, officials expect the company to be profitable for all of 1996 as well as 1997.

She said there have been no glitches in development of fixed-network products, and there have been no layoffs from Itron’s Spokane work force of 500.

About 30 temporary workers at the company’s Wauseca, Wis., plant have been let go, she said.

Itron also reported Wednesday a marketing alliance with CSW Communications, and deployment of a small fixed network in Laughlin, Nev., for the Nevada Power Co.

Itron said the 4,500-meter system would be used to evaluate its potential use throughout Nevada Power’s territory, which encompasses 474,000 customers in Las Vegas and the surrounding area.

CSW is a subsidiary of Central and South West Corp., an Austin, Texas-based utility. Terms of the pact between Itron and CSW call for the Spokane company to help provide a variety of utility management solutions.

Projects are planned or under way in several communities in Texas, Louisiana and Oklahoma.

, DataTimes ILLUSTRATION: Graphic: Itron’s stock prices nosedive