Cameco Q3 profit soars to $211M

Higher uranium prices and sales volumes at Saskatoon-basedCameco Corp. have resulted in a big jump in third-quarter profit and revenue and increased revenue projections for the year, the company says.

Cameco earned $211 million or 53 cents per share in the three months ended Sept. 30, up from $79 million or 20 cents per share a year earlier, the company said Wednesday.

Its third-quarter adjusted earnings quadrupled to $208 million, or 53 cents per share triple analyst estimates of 17 cents per share.

Cameco's revenue doubled to $597 million from $296 million, as the average uranium price realized by the company grew by 15 per cent and sales volume jumped 63 per cent compared with a year earlier to 8.5 million pounds.

In its revised outlook, the company said overall revenue for 2013 is expected to be up 30 per cent to 35 per cent compared with 2012. The previous estimate was growth of 25 per cent to 30 per cent.

The increased revenue forecast came despite a lowered production outlook of 23.1 million pounds of uranium, a decline of 200,000 pounds from the earlier forecast, due to the removal of Cigar Lake production from 2013 and lower expected production from its U.S. operations.

Cameco's president and CEO Tim Gitzel said the company is beginning to see benefits of a restructuring done earlier this year.

"We have adapted to the current challenging market conditions and we continue to pursue a growth plan to take advantage of the opportunity we see in the long term," Gitzel said in a statement.

Shares in the company were up $1.13 or about six per cent at $20.13 in trading on the Toronto Stock Exchange.

Uranium production in the quarter totalled 5.8 million pounds, up from 5.3 million pounds a year ago, while sales amounted to 8.5 million pounds, up from 5.2 million in the same quarter last year.

Cameco's average realized price increased to $52.59 per pound, up from $45.77 a year ago, while its average cost slipped to $26.19 per pound compared with $28.85 a year ago.

Last month, Cameco said its long-delayed Cigar Lake uranium mine in Saskatchewan would not begin producing until early next year because of problems during its startup.

The company had hoped to produce 300,000 pounds of milled uranium this year.

Cigar Lake has faced years of delays due to massive underground flooding at the mine.

Cameco also reported it has delivered itsfirst shipments of Canadian uranium to China under the new Canada-China Nuclear Co-operation Agreement.