Cameco Earnings: An Early Look

Earnings season is in full swing, with huge numbers of companies having already given their latest numbers to investors. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

Let's turn to Cameco (NYSE: CCJ  ) . The uranium miner has had a tough couple of years, as fallout from the Japanese earthquake and tsunami and attendant Fukushima Daiichi nuclear plant disaster has led ot major changes in the prospects for global nuclear power. Let's take an early look at what's been happening with Cameco over the past quarter and what we're likely to see in its quarterly report on Friday.

Stats on Cameco

Analyst EPS Estimate

$0.42

Change from Year-Ago EPS

(33%)

Revenue Estimate

$796 million

Change from Year-Ago Revenue

(18.6%)

Earnings Beats in Past 4 Quarters

2

Source: Yahoo Finance.

Can Cameco shine brighter this quarter?
Analysts have held steady on their prospects for Cameco's fourth-quarter results, although they've pulled back on their estimates for full-year 2013 by $0.20 per share. The stock, though, is signaling a potential turnaround, with shares up more than 18% since early November.

Cameco is the lowest-cost producer of uranium. That advantage over the much-smaller Denison Mines (NYSEMKT: DNN  ) and Uranium Energy (NYSEMKT: UEC  ) has become even more important given the plunge in uranium prices resulting from negative sentiment toward nuclear power.

But eventually, uranium should come back into favor as emerging-market countries see it as a viable source of carbon-free power. Cameco has a contract to supply uranium to China for the next 12 years, and as its Cigar Lake mining project ramps up toward the end of 2013, the company should see a further boost in production that could bolster its bottom line. Moreover, between nuclear giant Exelon (NYSE: EXC  ) and the ramping-up in nuclear energy that rival Southern Company (NYSE: SO  ) has made in recent years, prospects in the U.S. for uranium are looking more favorable -- and could get even more so if rock-bottom natural-gas prices finally start to rise substantially.

In Cameco's report, look for signs that the company is finding ways to sell its inventory at reasonable prices despite Germany's long-term move away from nuclear energy and other headwinds. If Cameco can survive this very difficult time, then its eventual recovery could be truly extraordinary.

Will nuclear bounce back?
Cameco is depending on companies like Exelon to keep relying on nuclear power, but is Exelon actually a better buy than the uranium miner? Find out in our premium research report on the utility giant, in which our top analysts go through their bull and bear arguments on the stock. Simply click here now for instant access.

Click here to add Cameco to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.


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Related Tickers

10/21/2014 4:04 PM
CCJ $17.10 Up +0.57 +3.45%
Cameco Corp (USA) CAPS Rating: *****
DNN $1.01 Down -0.01 -0.98%
Denison Mines Corp CAPS Rating: ****
EXC $35.00 Up +0.01 +0.03%
Exelon CAPS Rating: ****
SO $46.93 Up +0.15 +0.32%
Southern Company CAPS Rating: ****
UEC $1.17 Down -0.04 -3.31%
Uranium Energy Cor… CAPS Rating: **

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