SASKATOON - Cameco announced a revision of its long-term production goal and a drop in adjusted net earnings for the third quarter on Wednesday, saying it had been impacted by lower uranium prices and slower sales.
The uranium giant (TSX:CCO) reduced its long-term production target to 36 million pounds of annual supply by 2018, down from 40 million pounds a year, due to ongoing market uncertainty following last year's Japanese Fukushima nuclear disaster which was triggered by the earthquake and tsunami that hit the region.
Saskatoon-based Cameco reported net earnings of $82 million or 21 cents per share for the quarter ended Sept. 30, compared to $39 million or 10 cents per share for the same period a year earlier.
The company said those figures were impacted by higher mark-to-market gains on foreign exchange derivatives
Adjusted earnings for the quarter were $52 million or 13 cents per share compared to $104 million or 26 cents per share in 2011.
Quarterly revenue came in at $408 million, compared to $527 million a year ago.
The average analyst estimate compiled by Thomson Reuters had been for a profit of 27 cents per share and $562.3 million in revenue.
Cameco said its earnings were impacted by lower uranium sales volumes, lower realized prices, higher costs and higher exploration expenditures.
"We still expect to deliver on our sales, revenue and production guidance for the year," Tim Gitzel, Cameco's president and CEO, said in a statement.
"Longer term, we continue to see strong fundamentals. However, ongoing market uncertainty in the near term led us to review and adjust our growth plans this quarter. We decided to focus on advancing projects with the greatest certainty in the near term, from which we expect to achieve about 36 million pounds of annual supply by 2018 compared to the 40 million previously targeted."
Gitzel added that the company will continue with the rest of its projects "in a measured manner" so it has the option to bring them on as quickly as possible if profitable.
"By taking these actions, we expect to spread our capital spending over a longer period and decrease project-related expenses. Our focus will be on execution and reducing costs without compromising on our values," he said.
"With this adjustment, we believe we are positioned to continue to succeed in the current market environment, add value for our shareholders, and take advantage of the growth in uranium demand we see long term."
In August, Cameco signed a deal to buy one of Australia's largest undeveloped uranium deposits for $430 million US.
The company reached the agreement with BHP Billiton to acquire the Yeelirrie uranium project in Western Australia.
Yeelirrie is located about 650 kilometres northeast of Perth and about 750 kilometres south of Cameco's Kintyre exploration project.
Cameco is one of the world's largest uranium producers with mines, mills and conversion plants in Canada, the United States and abroad.