Moody's upgrades Itron

Moody's Investors Service said it upgraded Itron Inc.'s corporate family and probability of default ratings to Ba2 from Ba3 and its senior secured ratings to Ba1 from Ba2.

The agency also said it assigned a speculative-grade liquidity rating of SGL-2, indicating good liquidity.

The outlook was changed to stable from positive.

The upgrade reflects the company's strong operating results through 2010 and solid key credit metrics, which provide meaningful cushion to withstand an expected modest reduction in operating profitability through 2011, driven by slower deployment of Advanced Metering Infrastructure contracts and rising material costs, the agency said.

The ratings also reflect a strong global leadership among metering companies, competitive positioning, good degree of recurring replacement revenues and favorable diversification characteristics within its niche industry, Moody's said.

These strengths are offset by the company's vulnerability to the spending cycles of utilities, possible smart metering implementation delays, competitive pressures from new market entrants and rising commodity costs, which may weigh on margins, the agency said.

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