Cameco Earnings Trail Estimates as Uranium Price Falls

Cameco Corp., the world’s third-largest uranium producer, reported first-quarter profit and revenue that trailed analysts’ estimates after a decline in the price and sales volumes of the nuclear-reactor fuel.

Net income fell to C$9 million ($8.9 million), or 2 cents a share, from C$129 million, or 33 cents, a year earlier, Saskatoon, Saskatchewan-based Cameco said today in a statement. Profit excluding a loss on derivative contracts and other one-time items was 7 cents a share, missing the 8-cent average of 14 estimates compiled by Bloomberg. Sales declined 4.7 percent to C$444 million, less than the C$473 million average estimate.

The price of uranium for immediate delivery has slumped 40 percent since the March 11, 2011, earthquake and tsunami in Japan led to a meltdown at Tokyo Electric Power Co.’s Fukushima Dai-Ichi nuclear power plant. In response to the disaster, Japan suspended its fleet of reactors while Germany canceled license extensions, shut down some of its oldest nuclear plants and ordered the others closed by 2022.

“Relative to the same period last year, the reduction in earnings was attributed to lower uranium segment earnings due to lower volumes and lower realized prices,” Rob Chang, a Toronto-based analyst at Cantor Fitzgerald LP, said in a note today.

Uranium Sales

Cameco sold uranium during the quarter for an average of $48.42, 0.6 percent less than a year earlier, according to the statement. Sales of uranium were 5.1 million pounds, less than the 8.2 million a year earlier and the 5.17 million pounds projected by three analysts surveyed by Bloomberg.

Cameco fell 0.5 percent to C$19.55 at the close in Toronto. The shares have declined 0.2 percent this year.

The company affirmed its full-year forecast for uranium production of 23.3 million pounds and sales of 31 million to 33 million, according to the statement.

“Cameco continues to view the market is in ‘wait and see’ mode until catalyzed by events such as reactor restarts in Japan and a significant return to long-term contracting by utilities –- both of which the company believes will be realized,” Chang said in the note.

Kazatomprom, Kazakhstan’s state-owned producer, and Paris-based Areva SA are the biggest uranium miners, according to the World Nuclear Association.