(Reuters) - Cameco Corp (CCO.TO) (CCJ.N), 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.
The company’s average realized price for uranium slipped 2 percent year over year to C$48.25 per pound.
Uncertainty in the short and medium term is hampering the uranium sector’s recovery, Cameco said, with little pressure on either buyers or sellers to carry out sales.
Lower electricity revenue from Bruce Power, the Ontario company nearly one-third owned by Cameco, dropped 14 percent.
Net earnings for the first quarter fell to C$9 million ($8.9 million), or 2 Canadian cents per share, from C$129 million, or 33 Canadian cents per share a year ago.
On an adjusted basis, Cameco earned C$27 million, or 7 Canadian cents per share, down from C$121 million and 31 Canadian cents per share in the year-earlier quarter.
Revenue fell 5 percent to C$444 million.
Analysts expected the Saskatoon, Saskatchewan-based company to report earnings per share of 8 cents and revenue of C$474 million.
Last week, Japanese media reported that nuclear reactor restarts might begin in the autumn, giving Cameco shares a temporary lift.
Reporting by Rod Nickel in Winnipeg, Manitoba and Shounak Dasgupta in Bangalore; Editing by Jeffrey Benkoe