The decision would deal a fatal blow to Toshiba's ambitions to become a major player in the nuclear construction business after betting on Westinghouse’s AP1000 reactor design, which it hoped would anchor a new generation of nuclear power plants that were supposed to be easier to build and to deliver on time.
Westinghouse reportedly would continue to design nuclear reactors and complete construction work at two U.S. nuclear facilities it is still in the process of building in Georgia and South Carolina, commissioned by Southern Co. (SO +1.3%) and Scana (SCG +0.2%), respectively.
On CCJ's unusual warning to analysts that they were too bullish on 2016 performance, Issac told the TD Securities Mining Conference that the company felt compelled to “correct what we felt was a misalignment in earnings expectations" and that it wanted to be transparent with the investment community.
Even after recent production cuts, the market is still oversupplied and utilities will be covered until ~2022, when demand increases to the point it cannot be satisfied by existing supply, the CFO said.
Issac believes customers are taking a “wait-and-see” approach as to whether Kazakhstan, the world’s top uranium producer, follows through on last week’s announcement that it will cut output by 10% due to weak market conditions, sending uranium spot prices higher.
Among other uranium names in today's trade: URRE +27.6%, URG +6.1%, UEC +4.7%, DNN +4.4%, UUUU +4.2%, URA +3.7%.
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.