Exhibit 99.1

Itron Announces Third Quarter 2011 Financial Results

LIBERTY LAKE, Wash.--(BUSINESS WIRE)--October 26, 2011--Itron, Inc. (NASDAQ:ITRI) announced today financial results for its third quarter and nine months ended September 30, 2011. Highlights include:

• Quarterly and nine-month revenues of $616 million and $1.8 billion;
• Quarterly and nine-month GAAP net loss per share of $12.70 and $11.21, inclusive of a non-cash goodwill impairment charge recorded during the quarter of $540 million, or $13.27 per share;
• Quarterly and nine-month non-GAAP diluted net earnings per share of $0.92 and $3.10;
• Nine-month cash flow from operations and free cash flow of $154 million and $108 million;
• Quarterly and nine-month adjusted EBITDA of $74 million and $234 million;
• Twelve-month backlog of $901 million and total backlog of $1.4 billion; and
• Quarterly bookings of $441 million.

“Our third quarter revenue and cash flow were strong but our profitability was impacted by higher warranty costs and a significant goodwill impairment charge,” said LeRoy Nosbaum, Itron’s president and chief executive officer. “Despite these challenges in the quarter, our core operating results were strong. I have great confidence in this company’s prospects and I am committed to making the changes necessary to realize the potential inherent in our business. I am excited to be back at Itron and to lead this great company forward.”

Financial Results

Revenues increased $42 million, or 7 percent, for the quarter and $153 million, or 9 percent, for the nine-month period compared to the respective periods last year. Excluding a favorable effect from changes in foreign currency exchange rates for the quarter and nine-month period of $28 million and $68 million, respectively, revenue grew 2 percent and 5 percent over the same periods in 2010. The increase in revenues for the quarter and nine-month period was primarily due to increased electric, gas and water smart metering projects in the company’s International segment.

Gross margin for the quarter was 28.6 percent, which was lower than the prior year third quarter margin of 31.7 percent. The decline in margin was primarily due to increased warranty expense in Itron’s North America segment. Warranty expense increased $18 million, which compared to last year, impacted gross margin by 3 percentage points and impacted GAAP and non-GAAP diluted earnings per share by 28 cents. For the first nine months of 2011, gross margin was 30.8% compared to 31.3% in 2010.

“As part of our commitment to delivering outstanding service for our customers, and due to quality issues with certain third party components, we decided to proactively replace equipment in the field containing these particular components. This resulted in a significant warranty charge in the quarter,” continued Mr. Nosbaum. “However, we are confident that these actions are the best way to deliver on our commitments to our customers and are in the best long-term interest of our business.”

GAAP operating expenses were $673 million in the third quarter compared to $123 million in the same period last year. A non-cash goodwill impairment charge of $540 million was recorded during the quarter. The estimated impairment charge was primarily driven by adverse equity market conditions that caused a decrease in the company’s stock price as of September 30, 2011. The charge is attributable to goodwill recorded for Itron International’s Electricity and Water reporting units in connection with the acquisition of Actaris in 2007. The estimated charge is subject to finalization during the fourth quarter. This non-cash charge does not impact the company’s normal business operations or debt covenants. The remaining increase in operating expenses for the quarter was $10 million, of which approximately $6 million was due to currency fluctuations.

Net interest expense declined to $11 million for the quarter compared to $13 million in the third quarter of last year. During the quarter Itron repaid $224 million in convertible notes and refinanced its senior secured debt. The company has no further convertible notes outstanding. The refinancing of the company’s bank debt resulted in the write-off of unamortized debt fees of $3 million and a charge of $3 million to terminate an interest rate swap. These charges were offset by lower interest expense due to a decreased principal balance and lower effective interest rates.

GAAP net loss and diluted EPS for the third quarter and nine-month period were $517 million, or $12.70 per share, and $456 million, or $11.21 per share. This compares with net income of $28 million, or 68 cents per share, and $78 million, or $1.91 per share, in the same periods in 2010. The decrease in 2011 net income for the quarter and nine-month period was primarily due to increased warranty expense and the goodwill impairment charge of $540 million.

Non-GAAP operating expenses for the quarter, which excludes amortization of intangibles, restructuring charges and the impairment of goodwill, increased $10 million over prior year. An increase of $5 million was due to currency fluctuations and the remaining increase was primarily due to product research and development for new and enhanced products as well as increased global marketing activity. Non-GAAP net income and diluted EPS for the third quarter and nine-month period were $38 million, or 92 cents per share, and $127 million, or $3.10 per share. This compares with non-GAAP net income of $42 million, or $1.03 per share, and $121 million, or $2.95 per share, in the same periods in 2010. The decrease in non-GAAP net income for the quarter was due to decreased contribution from the North America segment related to higher warranty expense. The increase in non-GAAP net income for the nine-month period was primarily due to higher operating income in the International segment.

Restructuring

The company also announced today a series of projects to restructure its manufacturing operations to increase efficiency and lower manufacturing costs. These projects include the closure of several manufacturing facilities and a reduction in global workforce by 7.5 percent, representing a net reduction of approximately 750 full-time positions. In connection with the restructuring projects, Itron expects to record pre-tax restructuring charges totaling approximately $65 to $75 million over the next 15 to 18 months. As a result of the initiative, the company expects to achieve annualized cost savings of approximately $30 million by the end of 2013. See the press release issued today and Form 8-K for further details on the restructuring project.

Share Repurchase Program

The company also announced today that its Board of Directors has authorized the repurchase of up to $100 million of Itron common stock during the next 12 months. See the press release issued today and Form 8-K for further details on the repurchase plan.

Financial Guidance

For the full-year 2011, the company reaffirmed its prior revenue guidance and updated its prior EPS guidance as follows:

• Revenue between $2.3 billion and $2.4 billion
• Non-GAAP diluted EPS between $4.00 and $4.20

The company’s guidance assumes a Euro to U.S. dollar average exchange rate of $1.40, average shares outstanding of approximately 41.2 million, and a non-GAAP effective tax rate between 22 percent and 24 percent.

“Itron has a strong balance sheet and a resilient business with outstanding potential. We remain confident in our full-year revenue guidance for 2011 while reducing our full-year EPS range to reflect the special warranty charges incurred in our third quarter,” added Mr. Nosbaum. “While we are early in our forecasting process for 2012, we expect revenue to be flat to down five percent and our non-GAAP EPS to be flat to down a few percentage points, with some potential upside.”

Earnings Conference Call:

Itron will host a conference call to discuss the financial results contained in this release at 8:00 a.m. Eastern Daylight Time (EDT) on October 26, 2011. The call will be webcast in a listen-only mode. Webcast information and conference call materials will be made available 15 minutes before the start of the call and are accessible on Itron’s website at www.itron.com under the Investors page. The webcast replay will begin after the conclusion of the live call and will be available for two weeks. A telephone replay of the call will also be available approximately one hour after the conclusion of the live call, for 48 hours, and is accessible by dialing (888) 203-1112 (Domestic) or (719) 457-0820 (International), entering passcode 6304863.

About Itron

Itron is the leading provider of energy and water resource management solutions for nearly 8,000 utilities around the world. We offer end-to-end solutions that include electricity, gas, water and heat measurement and control technology; communications systems; software; and professional services. With nearly 10,000 employees doing business in more than 130 countries, Itron empowers utilities to responsibly and efficiently manage energy and water resources. To realize a sustainable future, start here: www.itron.com.

Forward-Looking Statements:

This release contains forward-looking statements concerning our expectations about operations, financial performance, sales, earnings and cash flows. These statements reflect our current plans and expectations and are based on information currently available. The statements rely on a number of assumptions and estimates, which could be inaccurate, and which are subject to risks and uncertainties that could cause our actual results to vary materially from those anticipated. Risks and uncertainties include the rate and timing of customer demand for our products, rescheduling of current customer orders, changes in estimated liabilities for product warranties, changes in laws and regulations, our dependence on new product development and intellectual property, future acquisitions, changes in estimates for stock-based and bonus compensation, increasing volatility in foreign exchange rates, international business risks and other factors which are more fully described in our Annual Report on Form 10-K for the year ended December 31, 2010 and other reports on file with the Securities and Exchange Commission. Itron undertakes no obligation to update publicly or revise any forward-looking statements, including our business outlook.

Non-GAAP Financial Information:

To supplement our consolidated financial statements presented in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, and free cash flow. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. Specifically, these non-GAAP financial measures are provided to enhance investors’ overall understanding of our current financial performance and our future anticipated performance by excluding infrequent or non-cash costs, particularly those associated with acquisitions. We exclude certain infrequent costs, particularly those associated with acquisitions, in our non-GAAP financial measures as we believe the net result is a measure of our core business. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. Finally, our non-GAAP financial measures may be different from those reported by other companies. A more detailed discussion of why we use non-GAAP financial measures, the limitations of using such measures, and reconciliations between non-GAAP and the nearest GAAP financial measures are included in this press release.

Statements of operations, segment information, balance sheets, cash flow statements and reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures follow.

Itron, Inc.

About Non-GAAP Financial Measures

The accompanying press release contains non-GAAP financial measures. To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, and free cash flow. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of Non-GAAP Financial Measures to Most Directly Comparable GAAP Financial Measures.”

We use these non-GAAP financial measures for financial and operational decision making and as a means for determining executive compensation. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and ability to service debt by excluding certain expenses that may not be indicative of our recurring core operating results. These non-GAAP financial measures facilitate management’s internal comparisons to our historical performance as well as comparisons to our competitors’ operating results. Our executive compensation plans exclude non-cash charges related to amortization of intangibles and non-recurring discrete cash and non-cash charges that are infrequent in nature such as purchase accounting adjustments, restructuring charges or goodwill impairment charges. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because they provide greater transparency with respect to key metrics used by management in its financial and operational decision making and because they are used by our institutional investors and the analyst community to help them analyze the health of our business.

Non-GAAP operating expense and non-GAAP operating income – We define non-GAAP operating expense as operating expense excluding the expenses related to the amortization of intangible assets, restructuring and goodwill impairment. We define non-GAAP operating income as operating income excluding the expenses related to the amortization of intangible assets, restructuring and goodwill impairment. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of expenses that are related to previous acquisitions and restructurings. By excluding these expenses we believe that it is easier for management and investors to compare our financial results over multiple periods and analyze trends in our operations. For example, expenses related to amortization of intangible assets are now decreasing, which is improving GAAP operating margins, yet the improvement in GAAP operating margins due to this lower expense is not necessarily reflective of an improvement in our core business. There are some limitations related to the use of non-GAAP operating expense and non-GAAP operating income versus operating expense and operating income calculated in accordance with GAAP. Non-GAAP operating expense and non-GAAP operating income exclude some costs that are recurring. Additionally, the expenses that we exclude in our calculation of non-GAAP operating expense and non-GAAP operating income may differ from the expenses that our peer companies exclude when they report the results of their operations. We compensate for these limitations by providing specific information about the GAAP amounts we have excluded from our non-GAAP operating expense and non-GAAP operating income and evaluating non-GAAP operating expense and non-GAAP operating income together with GAAP operating expense and GAAP operating income.

Non-GAAP net income and non-GAAP diluted EPS – We define non-GAAP net income as net income excluding the expenses associated with amortization of intangible assets, restructuring, goodwill impairment, amortization of debt placement fees and amortization of convertible debt discount. We define non-GAAP diluted EPS as non-GAAP net income divided by the weighted average shares, on a diluted basis, outstanding during each period. We consider these financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income. The same limitations described above regarding our use of non-GAAP operating income apply to our use of non-GAAP net income and non-GAAP diluted EPS. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP measures and evaluating non-GAAP net income and non-GAAP diluted EPS together with GAAP net income and GAAP diluted EPS.

Adjusted EBITDA – We define adjusted EBITDA as net income (a) minus interest income, (b) plus interest expense, depreciation and amortization of intangible asset expenses, restructuring and goodwill impairment and (c) exclude the tax expense or benefit. We believe that providing this financial measure is important for management and investors to understand our ability to service our debt as it is a measure of the cash generated by our core business. Management uses adjusted EBITDA as a performance measure for executive compensation. A limitation to using adjusted EBITDA is that it does not represent the total increase or decrease in the cash balance for the period and the measure includes some non-cash items and excludes other non-cash items. Additionally, the items that we exclude in our calculation of adjusted EBITDA may differ from the items that our peer companies exclude when they report their results. Management compensates for this limitation by providing a reconciliation of this measure to GAAP net income.

Free cash flow – We define free cash flow as net cash provided by operating activities less cash used for acquisitions of property, plant, and equipment. We believe free cash flow provides investors with a relevant measure of liquidity and a useful basis for assessing our ability to fund our operations and repay our debt. The same limitations described above regarding our use of non-GAAP operating income apply to our use of free cash flow. We compensate for these limitations by providing specific information regarding the GAAP amounts and reconciling to free cash flow.

The accompanying tables have more detail on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures and the related reconciliations between these financial measures.

CONTACT:
Itron, Inc.
Barbara Doyle, 509-891-3443
Vice President, Investor Relations
barbara.doyle@itron.com
or
Marni Pilcher, 509-891-3847
Director, Investor Relations
marni.pilcher@itron.com