As I mentioned on Twitter today, I decided to take a shot at an Itron (ITRI) entry ahead of earnings after the bell today.  Why? Last quarter, they missed badly and the stock gapped down.  When you get a situation like that, analysts greatly lower expectations and the bad news gets built into the stock, setting up a greater likelihood of a relief rally on the next earnings report.  Even if the company misses, a stock can rise if the expectations are real low. 

Itron reported results that beat estimates but continue to be awful (about in line with last quarter).  The stock is up a few percent after the bell because it beat the analysts estimates who had no expectations.  The company beat on both EPS and revenues with an EPS of .49 and revenues of $414 and trading up a few percent in after hours trading despite earnings plunging 50% over the year ago quarter.

Said the CEO, “This quarter was another challenge for Itron, especially compared against the second quarter of last year when we had the best quarterly performance in the history of the company,” said Unsworth. “Although we have talked about 2009 being a challenging year due to the economy and the timing of stimulus funds and AMI deployments, we continue to believe that next year we will begin to reap the rewards of our investments in this new technology based on the current schedule of business.”

Itron (ITRI) is a play on the future and I believe current weakness in the fundamentals just delays what will be many years of outstanding gains for this company.

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