Cameco (NYSE:CCJ) will release its quarterly report on Friday, and investors haven't been all that optimistic about the uranium company's ability to deliver growth on either the top or bottom lines. As nuclear power plants from Exelon (NYSE:EXC) and Southern Company (NYSE:SO) run into competition from low-cost natural gas fired plants, one key driver of uranium demand hasn't been in Cameco's favor for a long time, and investors aren't expecting a rebound in 2014, either.

During the 2000s, Cameco and the uranium industry on the whole surged ahead, as soaring fossil-fuel prices made nuclear power look a lot more attractive. But then, the Fukushima Daiichi disaster in Japan happened, leading even committed nuclear power players like Germany take a second look at their long-term nuclear strategies. In the aftermath, Cameco has struggled to regain its momentum, and shares haven't been able to make much headway even from 2008's lowest levels. 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 report.

Highly enriched uranium. Source: Department of Energy, via Wikimedia Commons.

Stats on Cameco

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$844.26 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will Cameco earnings manage to grow this quarter?
Analysts have had mixed views on Cameco earnings in recent months, boosting their fourth-quarter estimates by a penny per share but cutting their projections for the full 2014 year by $0.15 per share. The stock has managed to make some headway, though, rising 7% since late October.

Cameco's third-quarter earnings report showed just how much progress the company has made over the past year from a fundamental perspective. Its revenue doubled from year-ago levels, with adjusted earnings quadrupling. The company cited higher sales volumes and better prices along with a reduction in spending on exploration as helping to bolster its bottom-line growth, and CEO Tim Gitzel pointed to the restructuring that Cameco has done as delivering cost-saving benefits throughout the company.

Yet the real question that Cameco faces is whether nuclear power will continue to grow even after the Japanese nuclear reactor disaster. Cameco expects continued growth in emerging markets like China and India, with plans for nearly 100 new nuclear reactors to complete construction in the coming decade. Even in Japan itself, efforts to reopen shuttered nuclear reactors could drive uranium demand.

Still, one supply related catalyst could boost interest in Cameco and rival miner Rio Tinto (NYSE:RIO). The end of the Megatons-to-Megawatts program between the U.S. and Russia came last November, and with it, what seemed like an endless supply of warhead-sourced uranium will drop dramatically. That could pressure Exelon, Southern, and other utility users of uranium with higher prices, but it should help increase prospects for Cameco and Rio Tinto to get better profit margins from their mining activity.

In fact, Cameco is refocusing on uranium mining, selling off its almost 32% interest in a Canadian nuclear power facility to one of its partners. With the $450 million in proceeds, Cameco expects to reinvest in its core uranium business.

In the Cameco earnings report, watch to see how well the company capitalizes on what could be growing demand for uranium in the years to come. With analysts expecting sluggish revenue growth and falling earnings in 2014, any positive surprise could lift shares substantially.

Going beyond nuclear
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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Exelon and Southern Company. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.