Cameco profit plunges 93 percent on weaker uranium sales

Wed May 1, 2013 10:04am EDT
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By Rod Nickel

(Reuters) - Cameco Corp (CCO.TO: Quote) (CCJ.N: Quote), one of the world's biggest uranium producers, reported on Wednesday that quarterly profit plunged 93 percent, sparking a 5 percent drop in its shares as uranium sales fell and prices were weaker.

A significant decline in profit was widely expected, although not quite as steep, as Cameco had signaled that first-quarter shipments would likely be light. The timing of Cameco's uranium sales can vary widely, as customers choose when in the year they will accept deliveries.

"It's a slight miss, but it's not that big a deal," said Cantor Fitzgerald analyst Rob Chang.

Cameco reaffirmed its 2013 outlook for uranium sales and production and improved its outlook for sales of fuel services, factoring in its acquisition of fuel broker NUKEM, which closed in January.

The uranium market has been in a downward spiral since a massive earthquake and tsunami struck Japan in March 2011, crippling the Fukushima-Daiichi atomic power plant.

Countries from Japan to Germany have reduced their dependence on nuclear power in the aftermath of the worst meltdown since Chernobyl, sending the spot price for uranium, the material that fuels reactors, sharply lower.

Cameco shares were off 1.5 percent in Toronto and 1.7 percent in New York.

Cameco said it produced 5.9 million pounds of uranium during the quarter and sold 5.1 million pounds. A year earlier, it had output of 4.8 million pounds and sales of 8.2 million pounds.   Continued...