USEC ( USU) boosted its 2006 earnings estimates on Monday, citing higher uranium prices and better gross margins as the contributing factors. The company, a supplier of enriched uranium fuel for nuclear power plants, now expects revenue of $1.85 billion and net income of $105 million. Previously the company had forecast revenue of $1.8 billion and a profit of $65 million to $75 million. At the same time, USEC warned that it expects to face "financial challenges" in 2007 due to increased power costs. "We know that only a few months of the substantial increase in our electric power costs in 2006 are now reflected in our cost of sales, and we face tremendous financial challenges in 2007 and beyond," said John Welch, USEC's president and chief executive, in a statement. "We are taking steps to attempt to partially mitigate the higher power costs, but we know our profit margins will be under significant pressure in upcoming quarters." The company plans to release its 2006 results and provide its outlook for this year during the latter half of February. Shares for USEC closed down 70 cents, or 5.3%, at $12.45.