(Updates with share selloff, shareholder and analyst comments)
By Swetha Gopinath and Rod Nickel
April 28 Cameco Corp , 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
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), 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.
The selloff looked like "nervous money" getting out of the
stock, as the slumping uranium sector is slowly recovering, said
Brian Madden, portfolio manager at Goodreid Investment Counsel,
which owns the stock.
The industry continues to be oversupplied, but less so than
previously, Madden said. The biggest global producer
Kazatomprom said in January it would cut uranium
output by 10 percent.
Cameco said severance costs and a strengthening Canadian
dollar also weighed on its first-quarter results.
The net loss was C$18 million ($13 million), or 5 Canadian
cents per share, in the first quarter, compared with a profit of
C$78 million, or 20 Canadian cents per share, a year earlier.
Excluding items, the company lost 7 Canadian cents per
share, bigger than the average analyst estimate of 1 Canadian
cent, according to Thomson Reuters I/B/E/S.
Revenue at the Saskatoon, Saskatchewan-based company fell
nearly 4 percent to C$393 million, with declines stemmed by high
revenue from its Nukem unit, which is a nuclear fuel broker.
Analysts had expected revenue of C$372.345 million.
($1 = C$1.36)
(Additional reporting by Muvija M in Bengaluru; Editing by Maju
Samuel and Bernadette Baum)