American uranium enrichment company USEC has updated its 2006 revenue and earnings guidance showing a significant improvement in the financial health of the group.
With full-year revenue set to total approximately $1.85 billion with a gross profit margin of around 18%, net income for the year is expected to be of the order of $105 million, well above previous estimates of $65 - $75 million.
The main drivers for the improvement in earnings compared to previous guidance are higher uranium prices; a higher gross margin for SWU (separative work units); and the timing of expenditures for the American Centrifuge project.
“Our strong 2006 financial results reflect improving market conditions for nuclear fuel and cost-cutting actions taken by USEC management in recent years,” said John K. Welch, USEC president and chief executive officer. “Nonetheless,” he added, “we face tremendous financial challenges in 2007 and beyond,” a reference to significantly higher power costs.
USEC expects to release its fourth quarter and full-year 2006 earnings in late February.
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