Itron Inc. (NSDQ: ITRI) on Thursday posted third-quarter revenues that beat analyst expectations but drove shares of the smart-metering equipment company down slightly.

The Liberty Lake, Wash.-based company reported revenues of $484.8 million, or 81 cents per share, up 12 percent from revenues of $434 million in the same quarter last year.

Thursday's results also exceeded analyst estimates of $470.9 million, or 77 cents per share, according to a research note from Sanjay Shrestha, a senior analyst at Lazard Capital Markets.

Itron provides utilities and other customers with meters that monitor electricity, water, gas and heat usage, as well as data-collection and communication systems, including automated meter-reading technology.

Itron and other companies such as EnerNOC (NSDQ: ENOC), Silver Spring Networks and RuggedCom are seeking to help utilities in their quest to refurbish the nation's electricity grid into a "smart grid" able to track and manage energy usage at the utility and customer levels – a process renewable-energy experts say will be critical to integrating those energy sources into the nation's power supply.

Bookings for Itron's services rose to $894 million in the third quarter, up from $440 million in the same quarter last year, the company said.

Shrestha noted that its Actaris division, which does business outside of North America, drove Itron's better-than-expected third-quarter results. Itron said that its results were helped by favorable foreign exchange rates, which accounted for more than half of its increase in revenues.

But Paul Coster, analyst with J.P Morgan Securities, said in a research note that Itron could face headwinds in 2009 if the U.S. dollar continues to rise against other currencies.

Still, Coster wrote that he believes Itron's business to be "resilient" in the ongoing economic downturn, even though it is seeing slowing growth as utilities evaluate different smart-meter technologies and look to spend less money.

Shrestha agreed, writing that "the current credit crunch should have limited impact on ITRI's overall business given that its end customers are regulated utilities whose spending remains fairly stable and is a part of a long-term planning cycle."

In September, Itron won a $480 million contract to supply Southern California Edison with meters and communication equipment for the utility's $1.63 billion smart-metering program it expects to start implementing for its 4.8 million customers in 2009 (see SCE Preps $1.63B Smart-Meter Program).

In July, Itron made a similar agreement with San Diego Gas & Electric to replace or upgrade the utility's 2.3 million electric and gas meters with Itron's equipment.

At the same time, the company was downgraded from buy to hold by Stanford Group Co. on Thursday.

Stanford Group analyst Michael Horwitz said in a research note that the downgrade was "based on the current economic environment, business outlook for 2009, and risks to our estimates, such as project timeline risk and project execution risk" for its American large-scale utility projects. Like Coster, Horwitz also cited the threat that a stronger U.S. dollar may pose to Actaris' profitability.

Horwitz wrote that Itron expects relatively flat revenue growth from 2008 to 2009, with Actaris potentially seeing a drop in revenue over that time, based on comments from Itron management in a Thursday conference call.

Shares of Itron fell $1.20, or 2.4 percent, to $49.63 per share at the close of trading Thursday. 

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