Westinghouse's 2025 Q2 Earnings Call: Contradictions in Guidance, Inventory, and Market Strategy

Strong Financial Performance and Guidance Adjustment:
- Cameco reported strong financial performance acrossuranium, fuel services, and Westinghouse segments, leading to improved annual expectations.
- The most notable shift was in Westinghouse's expected 49% share of adjusted EBITDA, which is now between USD 525 million and USD 580 million.
- These results were driven by the commencement of a construction project for nuclear reactors in the Czech Republic and Cameco's disciplined marketing strategy.

Production Challenges and Risk Factors:
- Cameco's mining operations at McArthur River/Key Lake and Cigar Lake faced challenges with production timelines and unit costs due to planned maintenance and new mining areas.
- The company maintained guidance for production this year but acknowledged risks related to ground freezing, labor availability, and new equipment commissioning.
- The ongoing wildfires in the region also contributed to labor adjustments, but they are not the primary factor impacting production.

Westinghouse Growth and Market Outlook:
- Cameco's 5-year CAGR guidance for Westinghouse remains at 6% to 10% despite positive global nuclear project announcements.
- The cautious outlook is due to the need for projects to reach final investment decisions before being included in business plans, and the focus on conservative growth assumptions.
- Westinghouse's participation in international projects, like the Dukovany site in the Czech Republic, and the energy systems segment present significant growth opportunities.

Uranium Market Dynamics and Strategy:
- Cameco's uranium segment benefited from low-cost inventory, supporting strong financial performance.
- Contracting activity has been relatively low, with both spot and long-term contracting down in 2025 compared to 2024.
- Cameco maintains a disciplined approach to uranium marketing, focusing on long-term contracts and exposure to price improvements while protecting against market volatility.