Cameco (CCJ -14.5%) plunges in early trading and drags down other uranium producers after the company said it expected its 2016 adjusted profit to be significantly lower than analyst estimates and that it would cut 120 jobs at three of its uranium mines.
The announcement contained no details explaining the cause of the shortfall, but CCJ said its earnings expectations are not reflective of the strength of its core uranium business.
Cameco (NYSE:CCJ) -9.5% AH after saying it expects 2016 adjusted net earnings to come in "significantly lower" than analyst expectations.
CCJ says it delivered 31.5M lbs. of uranium during 2016 at an average realized price of C$54.46/lb., as expected, but expects to report an IFRS net loss for the year due in part to asset impairments resulting from fair market value assessments at year-end; it expects to make total adjustments to net earnings of C$180M-C$220M after-tax (C$0.45-C$0.56/share).
CCJ says "current earnings expectations are not reflective of the strength of our core uranium business," but it is planning measures to further cut costs and improve efficiency at its mines, including a 10% workforce reduction (~120 employees total) at its McArthur River, Key Lake and Cigar Lake operations.
Uranium Resources (NASDAQ:URRE) -21.7% AH after proposing a public offering of common stock; the actual size or terms are not yet determined.
URRE says it plans to use the proceeds to fund ongoing business activities, which may include technical studies, restoration commitments, capital expenditures, debt reduction, working capital and other general corporate purposes.
Shares of uranium producers shoot higher for a second straight day after spot prices for the commodity surge 10% after Kazakhstan's state nuclear-fuel company said the country would not produce as much uranium as planned this year.
Analysts say the announcement from Kazakhstan, the world’s biggest producer, may mark an inflection point for the market and could lead to higher prices.
In today's trade: URRE +32.4%, UEC +14.8%, DNN +8.7%, URG +6.8%, UUUU +5.5%, CCJ +4.1%, after big gains yesterday.
Uranium prices have largely been in free fall since the 2011 disaster at Japan's Fukushima Daiichi nuclear power plant, sliding to a 12-year low of $18/lb. in December, but prices yesterday jumped above $24 for the first time since September.