Ituran locates growth in Brazil and lifts payout

TEL AVIV (MarketWatch) � Ituran Location & Control Ltd. is looking for growth in 2012, particularly in Brazil, and in the meantime it has declared a chunky dividend for 2011.

Click to Play Diebold eyes emerging-market deals

In an interview with CFO Journal's Maxwell Murphy, Diebold Inc. Chief Financial Officer Bradley Richardson lays out the ATM and security-system manufacturer's acquisition strategy. Video by Vipal Monga.

The Azur, Israel, firm provides a variety of transportation-related services. Its technology finds stolen cars and prevents them from being stolen in the first place. For fleet owners, it offers tracking systems to give managers information about their vehicles on the road. And Ituran�s GPS service helps you figure out where you are and where you�re going.

The stock�s off nearly 15% in the past year. It�s up 20% from its 52-week low of $11.27, set Sept 12.

On Wednesday, the company ITRN �IL:ITRN �reported fourth-quarter profit of 29 cents a share, largely reversing a loss of 31 cents in the year-earlier quarter. Revenue fell 9.3% to $37 million,

Employing 1,300 people via operations in Argentina, Brazil, Israel and the U.S., Ituran reported that its subscriber base at Dec. 31 grew 3.1% from a year earlier to 623,000.

And Co-Chief Executive Eyal Sheratsky said in a statement that he�s expecting a further increase this year, particularly after Ituran�s Brazilian operations took steps to reduce churn, the industry term for subscribers moving to competing services.

Fourth-quarter subscription revenue slipped 1.2%, largely due to the strength of the U.S. dollar against Brazil�s real, Argentina�s peso and Israel�s shekel, Ituran reported.

/quotes/zigman/71388/quotes/nls/itrn ITRN 11.50, +0.19, +1.68%

Product revenue slumped 29% on the currency effects as well as fewer new cars sold in Israel and weaker sales at ERM, a provider of devices and know-how for third-party location systems.

The board declared a dividend of $1.23 a share for 2011. The payout amounts to all of Ituran�s profit for last year. The share price averaged $14.11 for 2011, indicating a yield of 8.7%.

In 2010, the company paid out $1 a share, producing a yield of 5.7%.

The new dividend is payable April 4 to holders of record March 20. And Ituran said it would now pay dividends quarterly instead of yearly; it affirmed a policy of paying out at least half its quarterly net income during the course of a year.

Brazil�s the big potential market for Ituran, says analyst Andrew Uerkwitz at Oppenheimer in his investment thesis for Ituran.

Its home market, Israel, �is unlikely to grow significantly,� he says. But Brazil requires all new cars to have anti-theft systems in them and the market for new cars is growing, Uerkwitz says. So �Ituran can continue to take [market] share with its competitively priced products and services,� he wrote.

Ituran�s fourth-quarter profit per share beat Uerkwitz�s estimate by a penny. The top line came up came up 7% short of his $39.8 million estimate due to the currency effects.