Uranium miner Cameco posts surprisingly big loss, shares plunge

Fri Apr 28, 2017 10:47am EDT
 
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By Swetha Gopinath and Rod Nickel

(Reuters) - Cameco Corp (CCO.TO: Quote) (CCJ.N: Quote), the world's second-biggest uranium producer, posted a bigger-than-expected quarterly loss, partly hurt by the termination of a key sales contract, driving shares to a nearly five-month low.

The stock fell more than 9 percent in Toronto trading to C$12.92, even though Cameco maintained its full-year guidance for deliveries and revenue.

Tokyo Electric Power (Tepco) (9501.T: Quote), the operator of Japan's wrecked Fukushima nuclear plant, scrapped its uranium supply contract with Cameco, the company said in February.

The Canadian company said its loss was also related to weak uranium prices amid a prolonged glut, tracing back to the 2011 tsunami in Japan which shut all of that country's nuclear reactors. A few have since restarted.

"We’re managing through the uncertainty, but even low-cost operations like ours, face pressure," Chief Executive Tim Gitzel said in a statement.

Spot prices of uranium, used to fuel nuclear reactors, dipped to a 13-year low late last year and have rebounded modestly in 2017.

"While the market will view the earnings miss as a negative, we point out that Cameco maintained its guidance across the board," said Rob Chang, analyst at Cantor Fitzgerald.

Its sales have historically been weighted to the last two quarters, when it is likely to get a higher price, he said.   Continued...