Itron and Silver Spring Networks both reported third-quarter earnings this week, giving the U.S. smart meter rivals a chance to highlight how they’re picking up traction in a slow market and lay out their next field of competition: the internet of things (IOT).
Itron reported third-quarter revenues of $469 million, beating analyst estimates of $450 million. It brought in net income of $17 million, or 43 cents per diluted share, slightly outpacing the same quarter in 2014.
But the company’s poor first half of 2015 dragged down its year-to-date performance, with net income of $10 million on revenues of $1.4 billion in the first nine months of this year, down from net income of $49 million on revenues of $1.5 billion over the same period last year.
Silver Spring’s third-quarter revenues of $74.7 million also slightly beat analyst estimates. While it marked a slight loss for the quarter in GAAP terms, it’s also coming off a more successful first half of the year. The company reported a net income of $18.1 million on revenues of $290.3 million for the first nine months of 2015, up from an $89.7 million loss on revenues of $113.9 million in the same nine-month period last year.
Itron shares fell slightly, while Silver Spring’s enjoyed a sizable jump after the Tuesday announcements.
Silver Spring’s third-quarter accomplishments included completing the network canopy deployment for Australian utility AusNet, announced in April, and winning a smart streetlight project for the Canadian city of Halifax, Nova Scotia.
Itron saw strong performance in its electricity metering business in North America, and is in the midst of cost-cutting and restructuring efforts that are expected to help improve its financial picture in the fourth quarter and beyond.
Judging from the comments made during their earnings conference calls, however, both companies are asking investors to start thinking of their future prospects far beyond traditional smart metering.
“Smart cities and internet-of-things applications and interoperability in industrial communications [are] driving new IOT opportunities,” said Itron CEO Philip Mezey in his opening comments.
Itron announced last month that it’s extending the Itron Riva distributed intelligence platform to its gas and water meters, as well as its electricity meters and the disparate end nodes to networking partner Cisco. It’s also developing a low-power IPv6 communications module that can allow battery-powered devices to run on the same network, and expects to roll that out starting next year.
Itron is performing the first real-world tests of Riva's expanded capabilities in deployments underway in Brazil, Hong Kong and Austria. It’s also integrating new endpoints, such as streetlights in a pilot project with utility customer BC Hydro, and a newly developed solar gate device expected to hit the market next year.
Silver Spring’s new fifth-generation networking platform, in turn, includes a low-power device dubbed Milli 5, and extended range and data capabilities that should be coming to market in the first half of 2016, said newly appointed CEO Mike Bell. Smart streetlighting projects make up the majority of Silver Spring’s non-metering deployments to date.
Both companies have seen their largest contracts awarded outside the United States. Silver Spring noted that it expects international revenue to reach 25 percent of its overall revenues by the fourth quarter of this year, while Itron pointed out emerging opportunities in European smart metering deployments.