Cameco Corp. is more optimistic about long-term demand for uranium than it it has been for five years, a top executive said Thursday after its stock price tumbled following the company’s unusual warning to analysts they were too bullish on the company’s 2016 performance.
The Saskatoon-based uranium miner took an extraordinary step Tuesday by issuing an announcement that analysts’ estimates for the company’s full-year results were too high. It said it expected to report a 2016 loss Feb. 9. The company’s share price lost about 10 per cent of its value on Wednesday but recovered nearly as much Thursday when it traded around $15.60 per share at midday on the Toronto Stock Exchange.
Grant Isaac, Cameco’s chief financial officer, told the TD Securities Mining Conference that the company felt compelled to “correct what we felt was a misalignment in earnings expectations,” noting that restructuring costs from shuttered operations and legal costs associated with a tax dispute will weigh on its 2016 balance sheet.
“So, facing this consensus view that exceeded our maintained core guidance and our disclosed other costs … we faced some choices,” Isaac told the analysts’ conference, adding the company wanted to be transparent with the investment community.
“We were not going to sit with the investment community and discuss our positive forward outlook on the uranium market, remain silent on the misaligned earnings expectations and then fly back to Saskatoon and put out an earnings announcement that didn’t meet the Street.”
For the rest of this article, click here: http://business.financialpost.com/news/mining/cameco-defends-decision-to-tell-analysts-they-were-wrong-but-sees-oversupply-issues-fading