The corporate logo of Cameco Corp. (TSX:CCO) is shown. THE CANADIAN PRESS/HO
July 27, 2012 - 9:43 AM
SASKATOON - Uranium miner Cameco (TSX:CCO) is reporting an 85 per cent drop in second-quarter earnings on lower sales, lower prices and higher costs.
Net earnings for the quarter came in at $8 million, or 2 cents per share compared to $55 million, or 14 cents per share in the same period last year.
Revenue was $391 million for the quarter, down from $426 million year over year.
The company cites lower earnings from its uranium business based on lower sales volumes, lower realized prices and higher costs.
On an adjusted basis, Cameco's earnings were $34 million, or 9 cents per share for the quarter compared to $71 million, or 18 cents year over year — missing analyst expectations by 15 cents.
Analysts polled by Thomson Reuters were on average expecting Cameco to earn 24 cents per share and post revenues of $515 million.
Shares in Cameco were down 93 cents, or four per cent, to $21.71 in early trading on the Toronto Stock Exchange.
"We saw some declines in our results this quarter, but we are in-line to deliver on our sales, revenue and production guidance for the year," said president and CEO Tim Gitzel in a release.
"Our operations performed well and we are pleased with the continued progress we see, particularly the productivity improvements we made in our 2013 production plan at McArthur River and our success in further advancing our Cigar Lake project toward first production."
Cameco said deliveries in the second quarter were low and it recorded a US$30 million expense related to a contract termination.
In June, Calypso Uranium Corp. (TSXV:CLP) said Cameco bowed out of their exploration agreement for several properties in Argentina as the result of a strategic shift in focus.
Cameco could have acquired a 51 per cent interest in Calypso's subsidiary Energia Mineral Inc. under a three-year option agreement signed in September 2010.
Under the 2010 agreement, Cameco had the option to spend $3 million in each of three years to acquire the 51 per cent equity stake in Energia. By pulling out of the final year of funding, it will have no equity stake in Energia.
Saskatoon-based Cameco is one of the world's largest uranium producers. It has mines, mills and conversion plants in Canada, the United States and abroad and produces fuel that runs nuclear power plants around the world.
News from © The Canadian Press, 2012