Cameco delivered a weaker-than-expected second quarter update on Friday, with earnings and revenue missing forecasts as uranium production was disrupted by difficult spring road conditions in northern Saskatchewan and earnings from Westinghouse fell sharply.
Key results:
- Revenue of C$814 million, down 7% and below expectations.
- Adjusted EPS of C$0.18 versus C$0.36 expected.
- Adjusted EBITDA of C$391 million.
- Net income of C$25 million, down from C$321 million a year earlier.
- Full-year uranium production guidance maintained.
Management described the result as normal quarterly variability and reiterated that the annual production outlook remains unchanged.
The more interesting development was at Westinghouse, which has confidentially filed for a potential US IPO. The timing, valuation and size remain uncertain, but a listing could help crystallise value in an asset that has become an increasingly important part of Cameco’s nuclear-fuel exposure.
Not a great quarter for CCJ, but the operational issues appear temporary and the unchanged production outlook is a positive. The potential Westinghouse IPO adds a fresh catalyst, although near-term earnings remain exposed to quarterly production timing and volatility in Westinghouse contributions. The longer-term uranium and nuclear-power investment case remains intact.
MM remains long & bullish CCJ US
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