October 27, 2017 / 12:03 PM / a month ago

Uranium miner Cameco posts surprise loss, shares dive 12 percent

(Reuters) - Canada’s Cameco Corp (CCO.TO) (CCJ.N) reported a surprise quarterly loss and cut its full-year production outlook on Friday as uranium prices extended their slump, driving its shares down 12 percent.

The global uranium industry is locked in a six-year tailspin, dating back to the 2011 tsunami that caused Japan to shutter all of its nuclear reactors, some of which have since restarted.

Tokyo Electric Power (Tepco) (9501.T) in February scrapped a supply contract with Cameco, the world’s second-biggest uranium producer, worth about C$1.3 billion in revenue through 2028.

“We can’t control the timing of a market recovery so we continue to focus on .. being as streamlined and efficient as possible,” Cameco Chief Executive Tim Gitzel said in a statement.

Cameco’s Toronto-listed shares plunged 12 percent at C$9.97, touching their lowest since January 2016.

Cameco has already lowered guidance a few times, but still managed to disappoint, said Rob Chang, analyst at Cantor Fitzgerald.

“Things appear to be worse than they say it is,” he said. “It seems the market, whoever is left in uranium, is hoping they were going to see at least neutral signs, if not positive signs.”

Saskatchewan-based Cameco’s third-quarter uranium sales volume fell 1 percent to 9.2 million pounds, and its average realized price for the metal fell 26 percent to C$41.66 per pound.

Revenue dropped 27.5 percent to C$486 million ($377 million).

The company now expects full-year production of 24 million pounds, compared with its previous forecast of 25.2 million pounds.

Cameco’s net loss was C$124 million, or 31 Canadian cents per share, in the third quarter, compared with a profit of C$142 million, or 36 Canadian cents per share, a year earlier.

On an adjusted basis, the company lost 13 Canadian cents per share. Analysts had expected a profit of 5 Canadian cents, according to Thomson Reuters I/B/E/S.

Reporting by Anirban Paul in Bengaluru; Editing by Maju Samuel and Meredith Mazzilli

Our Standards:The Thomson Reuters Trust Principles.
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