What's in Store for Energy Fuels (UUUU) This Earnings Season?

Energy Fuels Inc. UUUU is anticipated to report a loss when it reports second-quarter 2023 results next week. The Zacks Consensus Estimate for earnings stands at a loss of 5 cents per share. The estimate has remained stable over the past 30 days. The projection however indicates an improvement from the loss of 11 cents per share in the year-ago quarter.

The consensus mark for second-quarter revenues is currently pegged at $1 million, indicating a plunge of 85% from the prior-year quarter.

Q1 Results

In the last reported quarter, Energy Fuels reported revenues of $20 million, which was in-line with the Zacks Consensus Estimate. UUUU had reported an adjusted loss per share of 1 cent in the first quarter of 2023, which was narrower than the loss of 9 cents per share in the first quarter of 2022. The reported figure, however, lagged the consensus estimate for earnings per share of 53 cents for the first quarter.

The reported loss, however, excluded a net gain of $116.45 million (73 cents per share) related to the sale of the company's Alta Mesa in situ recovery project in Texas. Including this, the company had reported earnings per share of 72 cents in the first quarter.

Energy Fuels has a trailing four-quarter negative earnings surprise of 107%, on average.

Energy Fuels Inc Price and EPS Surprise

Energy Fuels Inc Price and EPS Surprise

Energy Fuels Inc price-eps-surprise | Energy Fuels Inc Quote


Factors to Note

During the first quarter of 2023, the company completed the sale of 300,000 pounds of uranium  (U3O8) to the U.S. Uranium Reserve, realizing total gross proceeds of $18.47 million or $61.57 per pound. The sales were made at a premium to the spot prices at that time. This led to a gross margin of approximately $35.85 per pound of uranium, or a gross margin of 58%.

For the full year 2023, the company plans to sell an additional 200,000 to 260,000 pounds of uranium into its current portfolio of supply agreements with U.S. nuclear utilities. The expected sales price is $54 - $58 per pound, which is likely to result in an estimated 46% - 50% gross margin.  The company had stated that it is closely tracking uranium prices, which have shown strength, for opportunities to sell additional uranium under long-term contracts to nuclear utilities at higher prices.

Prices for uranium have traded above the $50 per pound level in the second quarter as supply and demand fundamentals continued to improve. Uranium prices had scaled a 14-month high of $57.75 per pound in June, amid growing concerns of supply risks from Russia. The company is likely to have taken the opportunity to sell its inventory to take advantage of the prices. This is expected to have reflected on its second-quarter results.

The company also sold approximately 79,344 pounds of existing vanadium inventory in the first quarter of 2023. The average weighted sales price was $10.98 per pound, generating a total gross margin of 37%. Due to the high purity, the company’s vanadium was sold at a premium to vanadium spot prices prevailing at the time.

Over the past several months, Energy Fuels has been working on preparing four of its conventional uranium and uranium/vanadium mines for ore production resumption. This includes significant workforce expansion and rehabilitation and development of surface and underground infrastructure. This is expected to have resulted in higher expenses in the quarter.

The company is pursuing two new initiatives, which are its rare earth elements and TAT radioisotope initiatives, in addition to its existing uranium and vanadium products, which are expected to have led to higher costs. Nevertheless, the company’s ongoing efforts to lower costs are likely to have reflected in the second-quarter bottom line.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Energy Fuels this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for Energy Fuels is 0.00%.

Zacks Rank: The company currently carries a Zacks Rank of 2.

Price Performance

Energy Fuel’s shares have declined 10.1% in the past year, compared with the industry’s 83.4% growth.

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Stocks Poised to Beat Estimates

Here are some companies in the basic materials space, which according to our model, have the right combination of elements to post an earnings beat this quarter:

Livent Corporation LTHM, scheduled to release earnings on Aug 3, has an Earnings ESP of +2.43% and  a Zacks Rank of 1. You can see the complete list of today’s Zacks Rank #1 stocks here.

The Zacks Consensus Estimate for LTHM’s earnings for the second quarter is currently pegged at 46 cents per share.

Ecolab Inc. ECL, slated to release earnings on Aug 1, has an Earnings ESP of +0.50% and a Zacks Rank of 2.

The Zacks Consensus Estimate for ECL’s second-quarter earnings is pegged at a profit of $1.21 per share.

Axalta Coating Systems Ltd.  AXTA, which is slated to release earnings on Aug 1, has an Earnings ESP of +6.02% and a Zacks Rank of 2.

The consensus estimate for AXTA’s earnings for the second quarter is currently pegged at 39 cents per share.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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