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Cameco (CCJ) Set to Report Q1 Earnings: What's in Store?

Cameco Corporation CCJ is scheduled to report first-quarter 2024 results on Apr 30, before the opening bell.

Q1 Estimates

The Zacks Consensus Estimate for CCJ’s first-quarter earnings is pegged at 33 cents per share, which indicates a 65% improvement from 20 cents per share reported in the year-ago quarter. The estimate has remained stable over the past 30 days.

Q4 Performance

Cameco reported adjusted earnings per share of 15 cents in the fourth quarter of 2023 compared with 7 cents in the year-ago quarter. The company missed the Zacks Consensus Estimate of earnings of 21 cents per share.

CCJ has a trailing four-quarter earnings surprise of a negative 4.2%, on average.

Cameco Corporation Price and EPS Surprise

Cameco Corporation price-eps-surprise | Cameco Corporation Quote

Factors to Note

Uranium prices had started the quarter at around $92 per pound and soon crossed the $100 threshold and peaked at a 17-year high of $106 per pound on Jan 22, 2024. This was triggered by fears over a potential supply crunch following the declaration from Kazatomprom, the world's largest uranium mining company based in Kazakhstan, regarding its plans to cut uranium production to 80% of the permitted maximum output. This reduction from the previously announced 90% level is attributed to challenges in securing an adequate supply of sulfuric acid, a crucial component in the company's in-situ uranium mining process.

Uranium prices experienced another spike in early February, reaching $105 before undergoing a correction. Uranium prices ended the quarter at around $88 per pound, witnessing a 3.4% decline through the course of the quarter.   Despite this decline, uranium prices remained substantially elevated compared with the first quarter of 2023. CCJ reported an average realized price of $45.14 per pound in the first quarter of 2023.

Cameco plans to produce 18 million pounds (100% basis) at each of McArthur River/Key Lake and Cigar Lake in 2024.  The company is aiming for a total of 22.4 million pounds of production (its share). This represents an increase from the 17.6 million pounds produced in 2023. Cameco plans to sell between 32 million pounds and 34 million pounds of uranium in 2024, compared with the 32 million pounds sold in 2023. Fuel services production for 2024 is expected to be 13.5-14.5 million kgU, which is higher than 13.3 million kgU in 2023. Sales are expected to reach 12-13 million kgU compared with 12 million kgU 2023. This anticipated improvement in performance for the full year is likely to have positively influenced the first-quarter production and sales figures.

We thus expect the uranium production for the first quarter of 2024 to have been more than 4.5 million pounds produced in the first quarter of 2023. Sales are also expected to have exceeded the 9.7 million pounds sold in the first quarter of 2023. Fuel services production for the first quarter of 2024 is expected to have been higher than 4.1 million kgU produced in the year-ago quarter. Fuel services sales are likely to have been higher than 2.5 million kgU sold in the first quarter of 2023.

Higher sales volumes in both uranium and fuel services segments coupled with higher uranium prices are expected to have benefitted Cameco’s top-line performance in the to-be-reported quarter.

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Cameco has been progressing in its endeavors to lower administration, exploration and operating costs, and capital expenditure. The company has been carrying out critical automation, digitization and other projects, which are likely to have benefited its results.

In Nov 2023, CCJ acquired a 49% interest in Westinghouse Electric Company. It is expected to be immediately accretive to Cameco earnings. The company projects its share of adjusted EBITDA from Westinghouse to be between $445 million and $510 million in 2024.  A portion of this will is also likely to have been reflected in the first-quarter results.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for Cameco this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Cameco is 0.00%.

Zacks Rank: CCJ currently has a Zacks Rank #5 (Strong Sell).

Price Performance

Shares of Cameco have gained 90.7% over the past year compared with the industry’s 7.1% growth.

Stocks Poised to Beat Estimates

Here are some companies in the basic materials space, which according to our model, have the right combination of elements to post an earnings beat this time around:

Avient AVNT, scheduled to release first-quarter earnings on May 7, currently has an Earnings ESP of +0.43% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for AVNT's earnings for the first quarter is pegged at 69 cents per share, which projects a 9.5% increase from the year-ago quarter’s reported figure. AVNT has a trailing four-quarter average surprise of 7.1%.

Scotts MiracleGro SMG, expected to release earnings soon, has an Earnings ESP of +12.78% and a Zacks Rank of 2.

The Zacks Consensus Estimate for Scotts MiracleGro earnings for the first quarter is pegged at $3.33 per share, which projects a 12% decrease from the year-ago quarter’s reported figure. SMG has a trailing four-quarter average surprise of 3.4%.

Agnico Eagle Mines Limited AEM, scheduled to release first-quarter 2024 earnings on Apr 25, presently has an Earnings ESP of +3.15% and a Zacks Rank of 2.

The Zacks Consensus Estimate for AEM’s earnings for the first quarter is currently pegged at 58 cents per share. The estimate indicates year-over-year growth of 1.75%. AEM has a trailing four-quarter average surprise of 13.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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