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Cameco - Surprise, Surprise, Surprise

When a company has a history of erratic earnings surprises, the future will likely bring more of the same. I pointed this out in my article "There Are Serious Issues With URA," in reference to Cameco Corporation (NYSE:CCJ).As an investor, you shouldn't be hearing this from Gomer Pyle. But based on the many comments on the previously mentioned article and my first bearish article on uranium, the miss in Q1 earnings must have come as a surprise to many. This makes the fourth miss in the last five quarters for CCJ.This must be painful for investors in CCJ and also the Global X Uranium ETF (NYSEARCA:URA), which has 20% of its assets in CCJ.

Uranium Glut

The Q1 results were hampered by the ongoing oversupply of uranium as reported by CCJ management: "The Canadian company said its results were also hurt by weak uranium prices amid a prolonged glut."

Adding to market uncertainty are the recently filed Westinghouse U. S. division Chapter 11 bankruptcy protection and the slow restart of nuclear reactors in Japan. The Westinghouse situation might impact the completion of four AP1000 reactor units in Georgia and South Carolina. As for Japan, a picture is worth a thousand words.


by Steve Auger