By Joe Walker email@example.com
USEC Inc. still predicts nearly $35 million in earnings this fiscal year after showing marked declines in quarterly and six-month earnings compared with the same periods last year.
The firm, which runs Paducah's 1,500-employee uranium enrichment plant, projects $40 million in earnings next fiscal year, based on weakened prices in the natural uranium market. USEC has dropped plant production and boosted sales of natural uranium to generate cash, a move criticized by the atomic workers' union and federal lawmakers.
Comparing fiscal 2001 with 2000 performance:
Quarter (ending Dec. 31): Enriched uranium sales, $351.7 million, down from $431.8 million; natural uranium sales, $35.4 million, up from $15.8 million; combined revenue, $387.1 million, down from $447.6 million; earnings, $20.9 million (26 cents per share), down from $32.6 million (36 cents per share).
Six months: Revenue, $613.9 million, down from $678.5 million. Lower sales, aggressive pricing by European competitors and lower average prices billed to customers were key factors, USEC said. Earnings, $25.5 million (31 cents per share), down from $48.7 million (52 cents per share).
USEC expects sales for the fiscal year ending June 30 to be 7 percent lower than projected, while average customer prices should be slightly higher. Because of soft spot-market prices for new uranium, USEC is reducing its uranium spot sales to focus on longer-term contract sales with higher prices.
During the six-month period, USEC bought back another 2.6 million shares of stock, leaving more than 80 million shares outstanding. The stock is trading at roughly $6 per share, up so far this year but down from $14.25 when USEC was privatized in July 1998. USEC will pay a quarterly dividend of 13.75 cents per share March 15 to shareholders of record Feb. 23.
USEC expects to sign an agreement this year to lower prices for Russian uranium now accounting for about 60 percent of USEC's enriched uranium sales, compared with 40 percent from plant production. The firm denies atomic workers' union claims that it could close the Paducah plant as early as 2003 to become solely a broker of Russian uranium. Instead, the Paducah plant upgrade to stand-alone status is on schedule for Nuclear Regulatory Commission approval by March, USEC says. Paducah's sister plant in Ohio will be closed this summer.