Cameco Corp., a Canadian uranium company, has announced an 83% decrease in second-quarter profit. The decline is attributed to a significant foreign-exchange loss on its U.S. cash balances.
Profit and Earnings
The company’s net earnings for the quarter amounted to 14 million Canadian dollars ($10.5 million), or C$0.03 per share. This is a significant drop from the previous year’s earnings of C$84 million, or C$0.21 per share.
On an adjusted basis, excluding exceptional and one-off items, Cameco Corp. recorded a loss of C$0.01 per share, compared to a profit of C$0.18 per share previously.
Analysts’ Expectations
Analysts had predicted a more modest decline in earnings, with a consensus forecast of C$0.13 per share, according to FactSet.
Reasons for the Decline
Cameco Corp. attributes the decrease in profit to unrealized losses caused by higher-than-normal U.S. dollar cash balances held for the pending acquisition of nuclear power plant equipment maker Westinghouse Electric. Additionally, a strengthened Canadian dollar resulted in a C$44 million foreign-exchange loss.
Revenue Performance
Revenue for the period also experienced a decline, falling by 14% to C$482 million. In the same quarter last year, the company reported revenue of C$558 million. Analysts had anticipated a decline in revenue, but to a slightly lower figure of C$470.9 million.
Conclusion
Cameco Corp. has reported a significant decline in second-quarter profit, primarily due to a large foreign-exchange loss on its U.S. cash balances. The company will closely monitor its financial situation and continue its efforts to mitigate any future financial risks.
