Centrus Energy's Costs Drop 27% in H1: Can It Maintain the Momentum?

Centrus Energy LEU reported a 27% year-over-year reduction in the cost of sales in the first half of 2025. This marked a sharp turnaround from 2024, when the company had faced a 59% spike in costs.

In 2024, the company’s Low-Enriched Uranium (LEU) segment reported a 56% surge in the cost of sales. This was attributed to a 67% increase in the average unit cost of Separative Work Units (SWU) sold, partially offset by a 4% decrease in the SWU volumes. Also, 25% of the segment’s costs were tied to previously deferred sales. Excluding this, unit costs would have risen 27%. Uranium costs in 2024 were also up, driven by a 33% increase in the average unit cost of uranium sold and a 13% increase in sales volume. 

Meanwhile, the Technical Solutions segment reported a 69% increase in the cost of sales, reflecting costs incurred for the HALEU Operation Contract due to the transition from Phase 1 to Phase 2.

In the first half of 2025, the cost of sales for the LEU segment was $95.1 million, down 40% year over year. SWU costs decreased due to a 22% decline in the average unit cost of SWU sold and a 12% decrease in the volume of SWU sold. Uranium costs were down, reflecting the lower volume of uranium sold. 
The cost of sales for the Technical Solutions segment was $45.7 million for the first half of 2025, 42% higher year over year. The increase was due to a $13.8 million increase in costs incurred under the HALEU Operation Contract, partially offset by lower costs related to other contracts.

Centrus Energy’s gross profit surged 113% to $86.8 million in the first half of 2025, mainly due to a 27% decline in the cost of sales, as revenues had dipped 2% during this period.

The LEU segment contributed to the major part of the gross profit, generating $81.9 million in gross profit for the six months ended June 30, 2025, a 144% surge year over year. This growth reflects the timing and composition of multi-year contracts, which vary based on market conditions at the time of signing. This might not be repeated in the balance of the year, and is likely to be a bit lower than the first half of 2025.

Meanwhile, the Technical Solutions segment reported a gross profit of $4.9 million for the period, down 33% from last year, due to the increase in costs incurred under the HALEU Operation Contract. Because of the delay in completing Phase 2 of the HALEU Operation Contract, in November 2024, DOE extended Phase 2 to June 30, 2025. The segment’s gross profit will likely come in higher. 

In comparison, another uranium producer, Energy Fuels UUUU, reported a 48% surge in its cost of sales to $21.8 million in the first half of 2025 due to higher costs related to the mining of lower-grade Heavy Mineral Sand products at the end of the Kwale mine life. Costs were a staggering 103% of its revenues. 

Energy Fuels reported a gross loss of $0.7 million in the first half of 2025 against the gross profit of $19 million in the year-ago comparable period. This was attributed to lower revenues and higher costs. Energy Fuels’ revenues were down 38% in the first half of 2025 owing to lower uranium sales amid weak prices.

Cameco CCJ saw a 31% year-over-year increase in costs in the first half of 2025. Costs in the uranium segment increased 24% primarily on 7% increase in the average unit cost of sales and a 16% increase in sales volume, along with costs recognized for the planned shutdown at the Key Lake mill. Unit cost of sales was higher due to the increased cost of purchased material. In the Fuel services segment, costs increased 35% as a 55% increase in sales volume was offset by a 12% decrease in the average unit cost of sales.

Cameco, however, delivered a 46% year-over-year increase in gross profit to CAD527 million ($381) in the first half of 2025. This was attributed to a 35% year-over-year increase in Cameco’s revenues to CAD 1.67 billion ($1.2 billion), supported by a 16% increase in uranium sales volumes, higher realized prices and robust growth in fuel services.

LEU’s Price Performance, Valuation & Estimates

Centrus Energy shares have soared 337.5% so far this year compared with the industry’s 16.6% growth. During this time, the Basic Materials sector has risen 22%, while the S&P 500 has gained 14.4%.

LEU is trading at a forward 12-month price/sales multiple of 8.30X, a significant premium to the industry’s 3.06X.

The Zacks Consensus Estimate for Centrus Energy’s 2025 earnings is pegged at $4.34 per share, indicating a 2.91% year-over-year decline. The same for 2026 is $3.36, indicating a decline of 20.6%. Here is how the EPS estimates for 2025 and 2026 have been revised over the past 60 days.

The company currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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