UPDATE 2-Higher Cameco earnings disappoint, shares slide
(Recasts with share activity, CEO and analyst comments)
By Rod Nickel
April 29 (Reuters) - Canadian uranium producer Cameco Corp reported a jump in quarterly earnings on Tuesday, but results missed expectations and shares slipped to a 2-1/2-month low.
The world's third-largest uranium miner said it didn't expect improvement anytime soon in the uranium sector's challenging market conditions.
"Excess supply and discretionary demand for uranium products has resulted in further downward pressure on the uranium price," Chief Executive Tim Gitzel said in a statement. "While we do not expect improvement in the near to medium term, the long-term outlook for the industry remains strong."
Shares of the Saskatoon, Saskatchewan-based company lost 4.3 percent to C$23.09 in Toronto, losing more ground than fellow uranium producers. On the year, Cameco is up nearly five percent.
Uranium prices are hovering near their lowest since 2005 in a prolonged slump since an earthquake and tsunami struck Japan in March 2011, leading to the shutdown of nearly all reactors in the country. The disaster crimped Japanese demand for uranium and fueled fears about a backlash to nuclear power.
Earlier this year, optimism about Japan's plan to re-start reactors lifted uranium shares.
"The results are OK, but I think the market is just focusing on negatives given the falling spot uranium price," said BMO Capital Markets analyst Edward Sterck. "Cameco and the other uranium stocks have held up pretty well so far considering the declining uranium price and they may just be coming back into line." Continued...