Cameco Corp (TSX:CCO)(NYSE:CCJ) released its quarterly earnings last week, which surprised investors as the company had a strong performance to start the new fiscal year.
Sales were up 12% year-over-year and the company posted a profit of $55 million for the quarter, which is a big improvement over the $18 million loss that it incurred a year ago.
Cameco has been making strategic moves in order to make its operations more efficient. Earlier this year, the company announced that it would be shutting down production at two of its sites and it also significantly slashed its dividend in order to free up cash.
While Cameco hasn’t been doing anything terribly bad, it’s fallen victim to low uranium prices which have been the catalyst behind the company’s struggling performance. Unfortunately, until the commodity price can improve, Cameco will continue to struggle. The company even looked at supply cuts to try and help push prices up, which have had limited impact thus far.
Despite the positive results this past quarter, Cameco CEO Tim Gitzel was still reserved in his outlook, stating that “Today the market remains quiet. There are a lot of moving pieces, and utilities continue to evaluate the implications of what is perhaps best described as unprecedented noise in the political economy.” Cameco did not adjust its outlook for 2018 as it continues to be cautious in its approach for the year.
The share price was up more than 2% on Friday but the stock has been trading around book value for some time and this could be just what it needs to get some much needed momentum.
