Why Cameco Corp (NYSE: CCJ) stock is trading subdued

Free $100 Forex No-Deposit Bonus

Cameco Corp (NYSE: CCJ) stock is trading subdued on Feb 11th, 2019 after the company’s 2018 performance in line with outlook provided and reported the adjusted net earnings of $211 million. The production was lower than 2017 due to the suspension of production at McArthur River/Key Lake and the change in reporting for Inkai. In 2018, CCJ undertook a number of deliberate and disciplined actions, which resulted in lower direct administration and exploration costs, lower capital expenditures and $1.1 billion in cash on the balance sheet largely due to the inventory drawdown.

Why Cameco Corp (NYSE: CCJ) stock is trading subdued

Meanwhile, CCJ along with the partner Orano, had announced the extended shutdown of McArthur River/Key Lake for an indeterminate duration removing 18 million pounds (100% basis) annually from the market. The action resulted in the permanent layoff of approximately 520 site employees. A reduced workforce of approximately 200 employees remain at the sites to keep the facilities in a state of safe care and maintenance. We incurred approximately $29 million in severance costs as a result of the permanent layoffs. Our share of the cash and non-cash costs to maintain both operations during the suspension is expected to range between $7 million and $9 million per month. In addition, to further decrease costs, the workforce at the corporate office was reduced by approximately 150 positions, resulting in severance costs of approximately $14 million.

CCJ has reported fourth-quarter net income of $121.1 million, after reporting a loss in the same period a year earlier. Earnings, adjusted for non-recurring costs, were 39 cents per share. The company has posted revenue of $628.8 million in the period. For the year 2018, the company reported net income of $125.6 million, or 32 cents per share, swinging to a profit in the period. Revenue was reported as $1.58 billion

In accordance with the provisions in the supply agreement, an arbitration hearing to resolve the dispute took place during January of 2019. There are a number of post hearing steps and CCJ expect they will be completed by mid-May, 2019. The timing of the final decision will be dependent on how long the arbitrators deliberate following receipt of post-hearing submissions.

For 2019, CCJ currently expect the gross margin could be weaker, the balance sheet will remain strong. CCJ will continue to maintain a significant cash balance, and generate cash from operations, allowing the company to self-manage risk.

Copyright © 2019. All Rights Reserved. FXDailyReport.Com
Risk Warning: Trading CFDs is a high risk activity and you may lose more than your initial deposit. You should never invest money that you cannot afford to lose. FXDailyReport.com will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets.