Cameco Profit Exceeds Estimates as Uranium Sales Fall Less Than Projected

Cameco Corp., the world’s second- largest uranium producer, reported second-quarter earnings that topped analysts’ estimates as uranium sales fell less than some analysts predicted.

Profit excluding some items was 29 cents a share, Saskatoon, Saskatchewan-based Cameco said today in a statement. Analysts projected 24 cents, the average of 12 estimates in a Bloomberg survey.

Chief Executive Officer Jerry Grandey plans to almost double Cameco’s annual uranium output to about 40 million pounds by 2018 to help meet global demand for the raw material in nuclear reactor fuel. Second-quarter uranium sales fell 1.2 percent to 8.4 million pounds, which beat the 8 million expected by Orest Wowkodaw, a Toronto-based analyst at Canaccord Financial Inc.

“These results are just slightly better than expected,” Wowkodaw, who rates the shares “hold,” said today in a telephone interview. “Uranium deliveries came in a little stronger than I thought and some costs were lower.”

Net income fell to C$68 million ($65.3 million), or 17 cents a share, from C$247 million, or 63 cents, a year earlier, Cameco said. Sales dropped 15 percent to C$546 million.

Cameco declined 16 cents to C$25.86 at 4:16 p.m. in Toronto Stock Exchange trading. The shares have tumbled 24 percent this year.

Lower Forecast

Cameco said it reduced its full-year forecast for uranium sales to 30 million pounds, from 31 million to 33 million, after some customers deferred deliveries until next year.

Uranium revenue will fall 10 percent to 15 percent this year from 2009, the company said, more than its previous forecast of a decline of 5 percent to 10 percent.

Cameco also said it won regulatory approval to boost output from its flagship McArthur River uranium mine in Saskatchewan to make up for output lost in recent years because of operational issues. Output from the mine was reduced after an underground flood in 2003.

“This provides us with an opportunity to recover the almost 5 million pounds in production shortfalls that have occurred since 2003,” the company said in the statement.

Areva SA, based in Paris, is the world’s largest uranium producer by 2009 production, the World Nuclear Association said on its website.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net.

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email