Cameco Q2 Profit Increases - Quick Facts

(RTTNews) - Cameco(CCO.TO, CCJ) reported that its net earnings attributable to equity holders for the second quarter ended June 30, 2014 were C$127 million or C$0.32 per share up from C$34 million or C$0.09 per share in the second quarter of 2013. The company said its net earnings were affected by mark-to-market gains on foreign exchange derivatives compared to losses in 2013.

On an adjusted basis, earnings for the quarter were C$79 million or C$0.20 per share compared to C$61 million or C$0.15 per share in the second quarter of 2013. Analysts polled by Thomson Reuters expected the company to report earnings of C$0.17 per share for the quarter. Analysts' estimates typically exclude special items.

The change was mainly due to higher earnings from its uranium segment based on higher sales volumes and higher Canadian dollar average realized prices; a favourable settlement of C$28 million with respect to a dispute regarding a long-term supply contract with a utility customer.

It partially offset by settlement costs of C$12 million with respect to the early redemption of its Series C debentures; lower tax recoveries due to a decline in pre-tax losses in Canada.

Revenue for the quarter grew to C$502 million from C$421 million last year. Wall Street expected revenues of C$553.93 million.

For 2014, the company now expect production in our uranium segment to be 22.8 million to 23.3 million pounds (previously 23.8 million to 24.3 million pounds) due to a shift in the production schedule at Cigar Lake, to allow localized areas of the deposit to freeze more thoroughly. See Operations updates for more information.

In the NUKEM segment, the company has amended its 2014 outlook for sales volumes, revenues and the average unit cost of sales due to the ongoing weakness in the uranium market. It now expects its uranium sales volumes to be in the range of 7 million to 9 million pounds (previously 9 million to 11 million pounds) and has reduced its revenue expectations accordingly.

In addition, the decline in the uranium spot price is expected to have a positive impact on its unit cost of sales and it now expects a decline of 15% to 20% (previously an increase of 0% to 5%). The decline in unit cost is expected to offset the impact of the lower sales.