by Jeff St. John
Smart meter makers are finding that the economic slowdown - and the slowdown that's come as utilities wait for billions of dollar in stimulus funding - is taking its toll on their short-term sales.
Sensus is the latest exhibit in that trend. The Raleigh, N.C.-based maker of smart meters and supporting systems said Thursday that it lost $14.3 million on sales of $145 million in the quarter ending June 27, 2009, a deterioration from losses of $2.1 million on sales of $185 million in the same quarter last year.
Sensus has deployed more than three million of its smart meters to date. Big utility customers include Southern Co., whose subsidiaries Georgia Power and Alabama Power have installed about 1.2 million meters so far out of a planned 3.4 million or so (see 8.3M Smart Meters and Counting in U.S.).
This week, Sensus scored an expansion of another large-scale project to bring smart meters to Canada's Ontario province, winning contracts with 35 utilities that will deploy about 1.2 million meters out of a total of about 1.8 planned for the London Hydro Smart Meter Consortium Project.
Still, "The overall weak economic environment continued to impact our business in the first fiscal quarter," Sensus CEO and President Peter Mainz said in a prepared statement.
Sensus isn't the only smart meter company facing a tough short-term sales climate. A similar slowdown has caused some analysts to downgrade their expectations for smart meter makers like Itron (NSDQ: ITRI), Echelon (NSDQ: ELON) and ESCO Technologies (NYSE: ESE) through the rest of 2009 (see Green Light post).
The global economic downturn is the main reason for the slowdown. But in the United States, the promise of billions of dollars in federal matching grants to support smart meter projects is also part of the short-term problem.
The Department of Energy has set aside about $3.375 billion for commercial-scale projects that could include smart meter deployments (see DOE Issues Rules for $3.9B in Smart Grid Stimulus Grants).
Of that $3.375 billion pool, Texas utility Oncor has asked for $317 million, Baltimore Gas & Electric is seeking $200 million and Maryland-based Pepco Holdings is seeking $254 million (see Oncor Makes $317M Smart Grid Pitch and news reports here).
Among the utilities expected to seek stimulus aid are Arizona's Salt River Project and Arizona Public Service, which together have installed about 600,000 of a total deployment of about 1.8 million meters (see news report here).
And Florida Power & Light has said it will probably seek stimulus support for a $200 million project to bring 1 million smart meters to Miami. That's part of a $500 million, 4.5 million smart meter deployment planned by the utility (see A Million Smart Meters for Miami).
With more applications expected, and winners not scheduled to be announced until this fall, the waiting game could continue to keep smart meter contracts tight for the coming months, Ben Schuman, analyst with Pacific Crest Securities, said.
Disclosure: No positions