UPDATE 3-Cameco profit drops on lower production, sales
* Adj EPS C$0.21 vs Street view EPS $0.31
* Production falls 23 pct for quarter
* Sees 121 new reactors by 2020 vs pre-Fukushima view 131
* Shares down 1.2 pct at C$27.35 (Adds CEO comments, details)
By Julie Gordon
TORONTO, May 6 (Reuters) - Cameco Corp (CCO.TO) reported a 36 percent drop in quarterly profit on Friday, missing analyst expectations, as output and sales volumes at Canada's biggest uranium producer fell.
The company, whose shares dropped more than 20 percent during the quarter in the aftermath of the disaster at the Fukushima nuclear facility in Japan, also cut its annual revenue forecast because of a stronger Canadian dollar.
It now expects a 2011 increase in revenue of 10 to 15 percent, down from an earlier estimate of 15 to 20 percent.
Uranium production for the quarter was down 23 percent, but Cameco maintained targets for the year. The company said it sees continued strong demand for the nuclear fuel, despite the Fukushima disaster.
"Prior to Fukushima, we expected there would be 131 new reactors operating globally by 2020," Chief Executive Jerry Grandey said in a conference call. "Today, we expect there will be at least 121 new reactors constructed and operational."
Taking out the reactors that will replace ones set to go offline, the company sees 91 net new reactors worldwide in 2020, down about 10 percent from earlier projections of just over 100 new reactors.
That change will reduce the cumulative demand for uranium over the next 10 years by just 4 percent, said Grandey.
"Very little has changed in the way we see the world," he said, adding that the company is sticking with a plan to boost annual production to 40 million pounds by 2018.
Cameco's first-quarter earnings slid to C$91 million ($95 million), or 23 Canadian cents a share, from C$143 million, or 36 Canadian cents, in the same period of 2010.
When adjusted to remove one-time items, earnings fell to C$85 million, or 21 Canadian cents a share, from C$112 million, or 28 Canadian cents.
On that basis, analysts had expected earnings of 31 cents a share, according to Thomson Reuters I/B/E/S.
Revenue fell 6 percent to C$454 million from C$485 million.
Cameco produced 4.7 million pounds of uranium in the quarter, down from 6.1 million pounds a year earlier.
Production was slowed by maintenance issues at the McArthur River mine in Saskatchewan, which resulted in lower ore deliveries to the nearby Key Lake mill.
Production estimates for the year remain unchanged at 21.9 million pounds of uranium, and the company expects to sell 31 to 33 million pounds this year.
The Saskatoon, Saskatchewan-based company sold 6.1 million pounds of uranium in the quarter, compared with 6.6 million pounds the year before.
Cameco said that it sees uranium prices staying in the $60 to $80 a pound range in the long-term.
The company, which owns mines in Saskatchewan, Kazakhstan and the United States, said it expects uranium sales to be heavily weighted to the second half of the year.
Its shares were down 33 Canadian cents, or 1.2 percent, at C$27.35 on Friday afternoon on the Toronto Stock Exchange.
($1=$0.96 Canadian) (Reporting by Julie Gordon; editing by Rob Wilson)
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