Cameco hits 52-week high as it turns to profit in Q3, raises revenue outlook

The Cigar Lake uranium mine in northern Saskatchewan. Credit: Cameco

Shares of Cameco (TSX: CCO; NYSE: CCJ) hit a 52-week high on Tuesday after the world’s largest uranium producer reported a third-quarter profit and raised its 2023 revenue outlook amid rising price of the metal used in nuclear energy.

For the three-month period ended Sept. 30, the company posted a net income of C$148 million, versus a loss of C$20 million in the year-ago period. Net earnings on a per-share basis was C$0.34, compared to a net loss of C$0.05 a share last year.

The improved financial performance, according to Cameco, can be attributed to lower costs and a higher average realized price as market-related contracts benefitted from increases in the uranium spot price relative to a year ago.

Revenue for the quarter totalled C$575 million, up from C$389 million recorded in the same quarter of 2022. The company also had unrealized foreign exchange gains of C$54 million on US dollar cash balances.

As a result of the strong performance in its uranium an fuel services segment, the company said it now expects to earn between C$2.43 billion and C$2.58 billion this year, a C$500 million increase from its prior guidance.

“Our third quarter financial performance continues to demonstrate the benefits of our strategic decisions and the significant, positive momentum we are experiencing in the nuclear energy industry,” Cameco CEO Tim Gitzel said in the Q3 results release.

“We have again increased our consolidated revenue outlook for 2023, which is driven by higher average realized prices as a result of substantial uranium spot price improvements.”

Gitzel also commented on the overall strength of the uranium sector, noting that the geopolitical uncertainty brought on by Russia’s invasion of Ukraine has intensified supply concerns as future uranium supply and downstream processing is needed to balance the market.

“We are seeing durable, full-cycle demand growth across the nuclear energy industry. These factors lead us to believe that we are experiencing the industry’s best ever market fundamentals,” he said.

“These dynamics have also led the World Nuclear Association (WNA) to increase its demand forecast in their latest Nuclear Fuel Report to an average annual growth rate of 3.6%, compared to 2.6% in the 2021 report.”

Cameco closed Tuesday’s session 8.3% higher on the TSX, trading at C$56.73. Earlier, the stock had touched a 52-week peak of C$57.62. The Saskatoon-based company has a market capitalization of C$24.6 billion ($17.7bn).