Uranium producer Cameco Corporation (CCJ 2.50%) announced its fourth-quarter and full-year results late Friday night after the market closed and has a conference call scheduled for today at 1 p.m. The company reported earnings of C$64 million or C$0.16 per share. This was up from C$41 million, or C$0.10 per share in last year's fourth quarter. The company took lower writedowns in the quarter from the previous year.
Cameco produced a record amount of uranium in the fourth quarter as production was up 15% over last year's fourth quarter. However, sales volumes slipped 12% on the quarter mainly due to the normal quarterly variance in the company's delivery schedule. Overall, Cameco saw the company's revenue increase 15% to C$977 million on the quarter.
In addition to its financial results, the company also announced a major change in its future outlook. Because the current uncertainty in the uranium market has lasted longer than the company expected, it's moving away from its production target of 36 million pounds by 2018. While the company has an extensive portfolio of assets that could boost production in the future, given the weak current outlook it's not going to push its production growth as aggressively as before.
In its press release, the company said that "a fixed production target is no longer appropriate; ... we have decided the prudent action is to eliminate our previous 2018 supply target of 36 million pounds. This will allow us increased flexibility in order to deliver the best value through this period of uncertainty, while at the same time retaining the ability to benefit when more certainty returns to the market environment, as we expect it will. Today, our strategy is to profitably produce at a pace aligned with market signals to increase long-term shareholder value."
Looking ahead to this year, the company is slightly boosting its production from the 23.6 million pounds it produced in 2013 to a range of 23.8 million to 24.3 million pounds. Meanwhile, sales will be in a range of 31 million to -33 million pounds this year, meaning sales could end up being less than the 32.8 million pounds the company sold in 2013. However, higher realized uranium prices should equate to a 0%-5% increase in the company's revenue year-over-year.
