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Cameco Corp. (CCO-T), Canada's largest uranium producer, reported a 23-percent drop in second- quarter profit on Thursday as sales volumes declined, and it lowered its industry outlook in the wake of Japan's nuclear crisis.
Cameco revised its supply-demand outlook to take into account Germany's decision to move away from nuclear in the aftermath of the nuclear disaster at the Fukushima Daiichi power plant, and the current state of Japan's reactor fleet.
The company said it now sees global uranium demand in 2011 at 175 million pounds compared with a previous estimate of 180 million pounds, and world uranium demand in 2020 at 225 million pounds, down from an earlier estimate of 230 million pounds.
Cameco, which plans to double uranium production to 40 million pounds a year by 2018, said it still sees a significant deficit in supply over the next 10 years.
Net income in the second quarter dropped to $54 million, or 14 cents a share, from a year-earlier profit of $70 million, or 18 cents.
Excluding items, earnings came in at 18 cents a share, in line with the average estimate of analysts, according to Thomson Reuters I/B/E/S.
Revenue fell 22 percent to $426 million from $546 million in the year-ago period.
"As we anticipated, this quarter's financial results were lower due to variability in the timing of uranium deliveries," said Chief Executive Tim Gitzel in a release.
"We expect our sales will be heavily weighted to the second half of the year and anticipate stronger results in the third and fourth quarters."
QUARTERLY PRODUCTION RISES
Cameco produced 5.7 million pounds of uranium in the quarter, compared with 4.9 million pounds in 2010. It sold 5.8 million pounds compared with 8.4 million pounds a year ago.
The average realized price per pound of uranium rose 11 percent to $45.65.
The Saskatoon, Saskatchewan-based company said it was on target to produce some 21.9 million pounds of uranium in 2011, and to sell some 31 million to 33 million pounds this year.
Cameco, which produces uranium in North America and Kazakhstan, has sold 11.9 million pounds so far this year.
The company saw a 48 percent boost in production at its McArthur River and Key Lake operation. At Key Lake, the company plans to start up new oxygen, acid and steam plants this year.
Cameco added that development at the Cigar Lake mine in Northern Saskatchewan is progressing well and that the project remains on track for initial production in mid-2013.