Cameco Q3 Profit Rises; Backs FY09 Revenue Growth Outlook

11/2/2009 10:38 AM ET

(RTTNews) - Canada-based nuclear energy company Cameco Corp. (CCJ: News ,CCO.TO: News ) on Monday reported a 27% increase in profit for the third quarter, helped by lower expenses and higher one-time gains. However, adjusted earnings per share for the quarter declined 18% from the year-ago period due to lower earnings at the company's uranium and gold businesses. For fiscal year 2009, the company maintained its outlook for consolidated revenue growth, but raised its outlook for nuclear electricity revenue and lowered its forecast for gold production.

Third-Quarter Results

The company's net earnings for the third quarter increased to C$172.12 million, or C$0.44 per share, from C$135.45 million, or C$0.39 per share, in the same period last year.

The results for the latest quarter include a loss on restructuring of the company's gold business of C$33 million and gains on financial instruments of C$101 million. The year-ago quarter's results include gain on restructuring of the gold business of C$2 million, stock option recovery of C$52 million, losses on financial instruments of C$26 million and writedown of investments of C$20 million.

On an adjusted basis, net earnings for the latest quarter declined to C$104 million, or C$0.26 per share, from C$127 million, or C$0.37 per share, in the year-ago quarter.

Revenue for the quarter was C$694.10 million, down 4.8% from C$729.90 million in the corresponding period a year ago.

Total expenses for the quarter declined to C$469.67 million from C$553.18 million in the previous-year quarter. Loss on sale of assets during the quarter was C$2.34 million, compared to gain on sale of assets of C$0.13 million a year ago.

Segmental Results

Uranium

Cameco's revenue from the uranium business declined 17% to C$329 million from C$396 million in the year-ago period, due to a 15% decrease in reported sales volumes and a 2% decrease in the realized selling price in Canadian dollars. The decrease in the average realized price was related to lower realized prices under market-related and fixed-price contracts. Sales volumes for the quarter were 8.3 million pounds, down from 9.8 million pounds in the year-ago period, while average realized price declined to C$39.18 per pound from C$39.90 per pound a year ago.

Gross profit for the uranium business dropped to C$69 million from C$120 million a year ago. The company noted that the segment's profit for the quarter continued to be adversely affected by lower sales volumes and a higher unit cost of products and services sold.