* Excluding items, Q2 EPS C$0.36 vs C$0.25 forecast
* Revenue forecast raised, unveils C$1 bln shelf
* Shares slip 8 Canadian cents to C$29.30 (Adds details, comments)
By Cameron French and Euan Rocha
TORONTO, Aug 12 (Reuters) - Cameco Corp (CCO.TO) reported a higher and forecast-topping quarterly profit on Wednesday as stronger results from its electricity business offset the impact of higher uranium sales costs.
The uranium producer also raised its revenue forecasts and said it will file a shelf debt prospectus worth up to C$1 billion ($920 million). But Chief Executive Jerry Grandey -- who in March suggested Cameco could seek large acquisitions -- warned analysts not to assume a big deal is imminent.
"Cameco watchers may see this filing as a sign that we have identified a specific acquisition target. Let me merely restate that Cameco intends to maintain the financial flexibility to take advantage of opportunities when they might emerge," he said on a conference call.
"We know that the number of potential targets for acquisition are few," he added. The company raised C$460 million in an equity offering in March.
He said Cameco could as much as double its annual uranium output to 40 million pounds over the next decade using its current assets.
The increase in output comes as more than 100 new nuclear reactors are expected to be built around the world over the next decade, including 13 in China, Cameco estimates.
"In addition to China, we expect India, Korea and Japan to build more reactors while making deals with mining companies to secure reliable uranium supply," Grandey said.
Cameco has said it has had periodic talks with China about a possible supply deal, and Grandey said he was anxious for Canada to sign off on a civilian nuclear co-operation agreement with India, which would open up that market to the Canadian company.
For Cameco to double its output, however, it will need to resolve the problems at its Cigar Lake mine in northern Saskatchewan, which flooded during construction in 2006, and again last year while under repair.
Grandey said he expects that remediation work to fix the latest inflow should be done by the end of the year, at which point the company will be ready to begin pumping out water.
Cameco earned C$247 million, or 63 Canadian cents a share, in the quarter, up from C$150 million, or 42 Canadian cents.
Excluding items, it earned 36 Canadian cents a share, above the profit of 25 Canadian cents expected by analysts.
At mid-afternoon, the company's shares were down 8 Canadian cents at C$29.30 on the Toronto Stock exchange.
Costs of sales rose, and are expected to be as much as 25 percent higher this year than last, as the company bought uranium on the market in order to resell it at higher prices.
"Their low cost ore in Saskatchewan will always be there. market opportunities may not always be there," said Daniel Rohr, an analyst at Morningstar.
The company raised its 2009 revenue forecast, as it now expects increases in its uranium and electricity revenues. Revenue is seen rising 5 to 10 percent from C$2.86 billion last year, up from its previous estimate of no growth.
Uranium sales volumes are expected to total 34 million to 36 million pounds, much of which comes from third-party sources, including decommissioned Russian nuclear weapons, which Cameco reprocesses under an international agreement.
Besides the uranium business, the company owns minority stakes in Canada's Bruce Power nuclear station and Centerra Gold (CG.TO). Cameco has said it will eventually sell the Centerra stake, and media reports this week said the miner had hired bankers to facilitate a sale. Cameco has denied the reports.
$1=$1.09 Canadian Reporting by Cameron French; editing by Rob Wilson