CCJCameco Corporation (USA) (NYSE:CCJ) reported its consolidated financial and operating results for the third quarter ended September 30, 2016 in accordance with International Financial Reporting Standards (IFRS).

“Uranium prices are at the lowest levels we’ve seen in over a decade, and that’s making for difficult times in our market” said president and CEO, Tim Gitzel. “However, the strength of our long-term contract portfolio continues to keep our average realized price well above the weak market price.

“While we can’t control the market, we’re not idly waiting for the recovery we see coming. We’ve flexed our production levels, we’ve optimized our contract portfolio, and we’ve identified efficiencies within our business to streamline and adapt the company to the current conditions. We’ve taken significant actions and we’re continuing to make the changes necessary to remain competitive in a depressed environment. We are confident that our strategy will help us effectively manage through these low times, while positioning the company to benefit as the market improves and additional uranium is required to meet demand over the long term.”

THIRD QUARTER

Net earnings attributable to equity holders this quarter were $142 million ($0.36 per share diluted) compared to net losses of $4 million (losses of $0.01 per share diluted) in the third quarter of 2015 due to:

  • lower mark-to-market losses on foreign exchange derivatives compared to the third quarter of 2015
  • gain from termination of long-term contracts
  • higher gross profit from our uranium segment

partially offset by:

  • lower foreign exchange gains
  • lower gross profit from our NUKEM segment
  • lower tax recovery*

On an adjusted basis, our earnings this quarter were $118 million ($0.30 per share diluted) compared to earnings of $78 million ($0.20 per share diluted) (non-IFRS measure, see page 2) in the third quarter of 2015. The change was mainly due to:

  • gain from termination of long-term contracts
  • higher gross profit from our uranium segment
  • higher tax recovery

partially offset by:

  • higher losses on foreign exchange derivatives designated for use in the period compared to the third quarter of 2015
  • lower foreign exchange gains
  • lower gross profit from our NUKEM segment

FIRST NINE MONTHS

Net earnings attributable to equity holders in the first nine months of the year were $83 million ($0.21 per share diluted) compared to earnings of $75 million ($0.19 per share diluted) in the first nine months of 2015 mainly due to:

  • higher gross profit from our fuel services segment
  • mark-to-market gains on foreign exchange derivatives compared to losses in the first nine months of 2015
  • gain from termination of long-term contracts

partially offset by:

  • impairment of our Rabbit Lake operation
  • lower gross profit from our uranium and NUKEM segments
  • higher administration costs
  • higher exploration costs
  • higher foreign exchange losses compared to gains in the first nine months of 2015
  • lower tax recovery

On an adjusted basis, our earnings for the first nine months of this year were $54 million ($0.14 per share diluted) compared to earnings of $193 million ($0.49 per share diluted) (non-IFRS measure, see page 2) for the first nine months of 2015. Key variances include:

  • lower gross profit from our uranium and NUKEM segments
  • higher administration costs
  • higher exploration costs
  • higher foreign exchange losses compared to gains in the first nine months of 2015

partially offset by:

  • higher gross profit from our fuel services segment
  • gain from termination of long-term contracts
  • higher tax recovery (Original Source)

Shares of Cameco are up nearly 3% to $7.67 in pre-market trading Wednesday. CCJ has a 1-year high of $13.61 and a 1-year low of $7.41. The stock’s 50-day moving average is $8.35 and its 200-day moving average is $10.22.

On the ratings front, Credit Suisse analyst Ralph M. Profiti reiterated a Hold rating on CCJ, with a price target of $13.50, in a report issued on July 28. The current price target implies an upside of 81% from current levels. According to TipRanks.com, Profiti has a yearly average loss of 4.6%, a 27% success rate, and is ranked #3083 out of 4173 analysts.

Cameco Corp. operates underground uranium mines and produces uranium. It also provides processing services required to produce fuel for nuclear power plants, and generates clean electricity. The company operates its business through three segments: Uranium, Fuel Services and NUKEM. The Uranium segment involves the exploration for, mining, milling, purchase and sale of uranium concentrate. The Fuel Services segment involves the refining, conversion and fabrication of uranium concentrate and the purchase and sale of conversion services. The NUKEM segment provides access to traders of uranium and uranium-related products.