Itron Stock Price Hits 1-Year Low Analyst Blames Sudden Drop On Overreaction By Investors

As competitive threats emerged, stock of Itron Inc. dropped Monday to its lowest level in more than a year, before rebounding somewhat on Tuesday.

Shares of the Spokane maker of automated meter-reading equipment lost one-third of their value between Dec. 4, when they closed at $21.50, and Monday morning, when they briefly dropped to $14.25.

The stock closed Monday at $15.75, down $1.38 on the day. Volume was 318,000 shares. Normal volume is less than 150,000 shares.

Tuesday, Itron stock rose another $1.25 to close at $17 on volume of 182,000 shares.

Dain Bosworth analyst Charles Pluckhahn said Tuesday the pressure on Itron stock was prompted by misinterpretation and over-reaction to announcements Friday by two of the company’s competitors.

First, CellNet Data Systems Inc. said it would build automatic meter-reading systems in Los Angeles, San Francisco and San Diego.

The networks, initially designed to collect meter information from commercial and industrial customers, would extend to every meter in the state by the end of 1998, the California-based company said.

Later Friday, Pluckhahn said, came a more damaging disclosure from Mobile Telecommunications Technologies, a nationwide paging company.

Mtel said Enron had agreed to a six-year deal to buy meterreading systems based on Motorola pagers. Enron, a Texas utility moving aggressively into deregulated electricity markets around the U.S., expects to be reading six million meters by 2003.

Pluckhahn said both threats are overstated.

He predicted CellNet would restrict its efforts to just commercial and industrial customers. And Enron will find that its push to get California regulators to separate meter reading from the distribution of power will backfire, he said.

Itron, Pluckhahn noted, opposed the split, which accounts in part for Enron’s decision to use the more expensive Mtel technology.

Enron will be able to cover the extra cost because it will be able to buy power more cheaply than its competitors, he said.

Itron spokeswoman Mima Scarpelli said there was no news from the company to account for activity in the stock. Fundamentals are expected to continue a turnaround that yielded a profit in the quarter that ended Sept. 30, she said.

Scarpelli said the drop in Itron’s stock should not do any long-term damage. “We do not foresee a need to go to the capital markets in 1998 for more financing,” she said.

Itron employs nearly 600 at its Spokane Valley plant. The company has other facilities in Minnesota, Florida and California.

, DataTimes