"We've seen the word uncertainty a lot over the past months to describe the state of the nuclear industry and that term has proven to be very accurate," Cameco chief executive Tim Gitzel said Thursday.
"While we can still clearly see positive growth in the long term it has been difficult to read the near term and although this remains true today we do have some clarity on certain issues that resulted in adjusting our plans."
The uranium miner (TSX:CCO) announced a cut its long-term production target to 36 million pounds of annual supply by 2018, down from 40 million pounds on Wednesday after it reported weaker than expected third-quarter results.
However even with the lower production target, Cameco still expects to grow its production significantly from its current annual output of about 21.7 million pounds.
Gitzel said the company was prioritizing its capital spending on its most promising projects.
"We'll continue with the remaining projects in a measured manner," he said.
"This approach should preserve our ability to respond with additional new production as quickly as possible if profitable to do so."
RBC Capital Markets analyst Fraser Phillips rated Cameco "outperform" with "above average" risk, but noted that the weak earnings and cut to the production outlook was a negative for the company.
"Due to the revised market outlook, Cameco has decided to focus primarily on advancing its brownfield projects, while deferring development of its greenfield projects," Phillips wrote in a note to clients.
"This will lead to spreading out the capital spending over a longer period of time and decreasing project-related expenses."
BMO Capital Markets said it recently cut its own outlook for nuclear power and uranium demand, and forecast Cameco's production reaching 30 million pounds by 2018.
"With this outlook already baked into forecasts, BMO maintains its outperform recommendation for Cameco," wrote analyst Edward Sterck, who had a $29 price target on the company.
Late Wednesday, Saskatoon-based Cameco reported a profit of $82 million or 21 cents per share for the quarter ended Sept. 30, compared to $39 million or 10 cents per share for the same period a year earlier.
Quarterly revenue came in at $408 million, compared to $527 million a year ago.
Adjusted earnings for the quarter were $52 million or 13 cents per share compared to $104 million or 26 cents per share in 2011.
The average analyst estimate compiled by Thomson Reuters had been for a profit of 27 cents per share and $562.3 million in revenue.
Cameco said its earnings were impacted by lower uranium sales volumes, lower realized prices, higher costs and higher exploration expenditures.
In August, Cameco signed a deal to buy one of Australia's largest undeveloped uranium deposits for $430 million US.
The company reached the agreement with BHP Billiton to acquire the Yeelirrie uranium project in Western Australia.
Cameco is one of the world's largest uranium producers with mines, mills and conversion plants in Canada, the United States and abroad.
Shares in the company closed down 97 cents or five per cent at $18.40 on the Toronto Stock Exchange on Thursday.Suggest a correction