Uranium mining company Cameco Corporation (CCJ -2.53%) recently reported its first-quarter results. The company also provided its outlook for the uranium market. Uranium prices have struggled since the Fukushima nuclear power plant meltdown in March 2011, and while Cameco sees many of the challenges faced by the company in the past three years to continue in the short term, it is optimistic about the long term.

Cameco's Q1 results
Last week, Cameco reported a sharp increase in its quarterly earnings as the company benefited from the sale of its interest in Bruce Power Limited Partnership as well as higher deliveries. The company reported first-quarter earnings of C$131 million, or C$0.33 per share, compared to C$9 million, or C$0.02 per share reported for the same period in the previous year. After excluding the sale of interest in Bruce Power and other one-time items, Cameco's earnings for the quarter were C$0.09 per share, a penny short of analysts' expectations.

Cameco's revenue for the quarter fell 6% to C$419 million, falling short of Street estimates of C$472.77 million. While uranium sales for the quarter rose 35%, the uranium price for the quarter fell 4%.

Challenges in the short to medium term
While I have a bullish outlook for Cameco and the uranium market, the company is expected to face challenges in the short to medium term as uranium prices continue to struggle. In fact, this was something Cameco CEO Tim Gitzel noted last week. Market conditions in the first quarter were similar to those seen in 2013. Lower contracted volumes put downward pressure on both spot and long-term uranium prices, according to the company. Indeed, there is still supply/demand imbalance in the uranium market, which is keeping prices under pressure. The trend is expected to continue in the medium term.

The uranium market has remained depressed since the March 2011 Fukushima nuclear power plant disaster, which subsequently led to the shutdown of nuclear reactors in Japan. In fact, the depressed market conditions even forced mining giant BHP Billiton (BHP -0.52%) to shut its uranium division back in 2012. The diversified miner exited the uranium business by selling its Yeelirrie uranium deposit in Western Australia to Cameco. Even Goldman Sachs (GS -0.49%), which is involved in the physical commodity trading business, exited the uranium business earlier this year.

The depressed market conditions have forced uranium miners to cut production. In fact, this is one of the reasons why the long-term outlook for uranium market and miners has improved. The other reason is an anticipated increase in demand, driven by countries such as China, India, South Korea, and Russia. Also, Japan's recently adopted Basic Energy Plan sees nuclear power playing an important role in the country.

Long term outlook
It was the shutdown of reactors in Japan that significantly depressed the uranium market. In fact, Japan's previous government was even planning to completely phase out nuclear energy. However, the government of Shinzo Abe believes that nuclear energy has a future in Japan.

Indeed, Japan has given a big boost to the uranium market. This was something even Cameco acknowledged last week. The company said that the approval of a new energy plan in Japan that confirms nuclear power will remain a key electricity source for the industry has been one of the developments solidifying the positive long-term outlook for the uranium market. Although there are challenges for uranium miners in the near term, the positive long-term outlook for the uranium market is the reason why I remain bullish on Cameco.