Quarterly Reports - 2009 - Q3

Cameco Corporation (TSX: CCO; NYSE: CCJ) today reported third quarter 2009 net earnings of $172 million ($0.44 per share diluted), $37 million higher than net earnings of $135 million ($0.39 per share diluted) recorded in the third quarter of 2008. For the nine months ended September 30, 2009, net earnings were $501 million ($1.29 per share diluted), $82 million higher than net earnings of $419 million ($1.21 per share diluted) recorded in the first nine months of 2008.

Third quarter 2009 adjusted net earnings1 of $104 million ($0.26 per share adjusted and diluted) were 18% lower than in the third quarter of 2008. Adjusted net earnings1 for the first nine months of 2009 were $334 million ($0.86 per share adjusted and diluted), 19% lower than in 2008 due to lower earnings in the uranium and gold businesses, partially offset by higher results in the fuel services and electricity businesses.

"Cameco remains on target for another strong year in revenue and cash flow," said Cameco president and CEO Jerry Grandey. "Our focus on performance has given Cameco the capacity to respond to the positive long-term fundamentals we see in our business -- supplying uranium fuel to an energy-hungry world where nuclear is increasingly seen as the leading, credible option for clean energy generation."

In our uranium business, third quarter profits were in line with our quarterly delivery expectations communicated in last quarter's MD&A. Profits for both the third quarter and the first nine months of 2009 continue to be adversely affected by the higher unit cost of product and services sold. Consistent with prior disclosure, our unit cost of product and services sold is still expected to be 20% to 25% higher when compared to 2008. The expected cost of produced material remains unchanged from the last two quarterly reports. The increase in the unit cost of product and services sold is largely attributable to uranium purchases at prices substantially higher than our costs of production to support our sales activities, including higher trading volumes.

Our gold business was impacted by lower gold production and higher operating costs during the quarter and for the first nine months of the year.

1 Net earnings for the quarters and nine months ended September 30, 2008 and 2009 have been adjusted to exclude a number of items. Adjusted net earnings is a non-GAAP measure. For a description see "Use of Non-GAAP Financial Measures" on page 9.

In our electricity business, an increase in the realized price led to stronger results in the quarter and for the first nine months of the year. The increase was due largely to revenue recognized by BPLP under its agreement with the Ontario Power Authority (OPA). In addition, an increase in generation contributed to the improved results for the first nine months.

Results in our fuel services business were positively impacted by lower operating costs during the quarter and for the first nine months of the year. In addition, higher revenues in the first nine months of the year as a result of an increase in the average realized price for fuel services products contributed to the stronger yearly results.

Note: All dollar amounts are expressed in Canadian dollars unless otherwise stated. Cameco's unaudited third quarter financial statements and management's discussion and analysis are available on our company's website cameco.com, on SEDAR at sedar.com and on EDGAR at sec.gov/edgar.shtml.