Cameco shares rise on stronger-than-expected profit

Mon Feb 14, 2011 10:13am EST

* Shares up 5.03 percent at C$43.64

* Company forecasts stronger uranium sales in 2011

TORONTO Feb 11 (Reuters) - Shares of Cameco Corp (CCO.TO) rose more than 5 percent on Monday, the first day of trade after the uranium producer reported higher-than-expected fourth quarter and full year 2010 earnings.

The Saskatoon, Saskatchewan-based company reported a lower net profit on Friday, but fourth quarter earnings were up 12 percent after stripping out the impact of a one-time 2009 gain.[ID:nN11288033]

The uranium producer's underlying profit benefited from higher uranium prices and lower production costs, easily beating analyst expectations.

The shares rose 5.03 percent to C$43.64 on the Toronto Stock Exchange on Monday.

"Cameco remains the leader in the uranium industry," said RBC Capital Markets analyst H. Fraser Phillips in a note to clients. "We believe the shares will continue to benefit from strong uranium markets and have further upside potential."

Cameco said it would boost sales in 2011 to 31 to 33 million pounds of uranium, versus 29.6 million pounds in 2010.

Analysts expect demand for uranium to stay strong throughout 2011 as Asia builds more reactors, and nuclear power gains in popularity around the world.

(Reporting by Julie Gordon; Editing by Frank McGurty)

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