"In some ways it's a simple business," said USEC Inc.'s vice president and chief financial officer. "It's a unique company with one product line. We sell enriched uranium to 65 customers."

But as Henry Z. Shelton quickly acknowledged, business isn't quite that simple for the recently privatized company formerly known as the U.S. Enrichment Corp.

Once part of the U.S. Department of Energy, USEC is still a player in national security matters by virtue of its commitment to buy highly enriched nuclear warhead material from Russia to blend into power plant fuel.

Instead of having to satisfy congressional overseers, however, USEC now is judged by its stock market performance, and over the past year, financial analysts have found it wanting.

USEC, with revenue of more than $1.4 billion and with its headquarters in Bethesda, became a private company on July 28, 1998, through a $1.9 billion initial public offering. Initially sold at $14.25, the company's stock closed Friday at $10.93 3/4, up 6 1/4 cents.

"From an investor's standpoint, it hasn't gone well," said Steven L. Fleishman of Merrill Lynch Global Securities. "The stock hasn't gone up. They've had some earnings disappointments. They've done some good things, but overall, the first year has been disappointing."

"They experienced growing pains learning how to be a publicly traded company," said M. Carol Coale of Prudential Securities Inc. "It looks like the steps they've taken internally have been in the right direction, but they underestimated or miscalculated the direction of the external market."

USEC has converted the equivalent of more than 3,000 Russian nuclear warheads into fuel through its participation in the five-year-old Megatons to Megawatts program.

But this success has come at a cost: The contract requires USEC to pay more for the material than it would pay to produce it at its own plants.

When prices were higher for uranium enrichment -- which is the process the company sells - USEC could still make money even with the higher costs of its Russian contract. But prices have been depressed by aggressive competition from the world's fourth-largest processor, URENCO, which is owned by British, Dutch and German utility companies.

The biggest negative is that the demand for USEC's product dropped dramatically, falling by 15 to 20 percent, according to Merrill Lynch's Fleishman.

The market situation has been difficult, but USEC has taken important steps to control costs and has made some other improvements in operations, Fleishman said.

USEC President William H. Timbers Jr. said the past year has seen a dramatic shift in corporate attention. Before privatization, Timbers and his crew spent approximately 80 percent of their time on government affairs. Now they spend about 85 percent of their time on business matters.

In the shorthand of the corporation, management now spends more time on "212 problems" instead of "202 problems," referring to a shift in its phone-calling activity from Washington to New York.

What counts in government is process, but what now counts at USEC is performance, said Timbers. "That was a turnaround."

Among the steps that the company has taken to improve performance is taking over direct operation of its production plants from Lockheed Martin Corp. as of last May. "What U.S. business has another U.S. business running their operations for them?" Timbers asked. In eliminating the middleman, USEC reduced its costs by about $11 million and created a more direct relationship with the 4,500 workers at its enrichment plants in Kentucky and Ohio, he said.

A recent Washington Post investigation revealed that thousands of uranium workers at the Paducah plant were exposed to radioactive materials without their knowledge when the plant was still a government facility. USEC, however, is exempt from liability on claims arising from when the plants were government-owned. The plants are now regulated by the Nuclear Regulatory Commission rather than the Energy Department.

Besides the two plants, USEC's other employment center is in Bethesda, where it has a headquarters staff of about 160.

The company also restructured its deal with utilities that operate a dedicated coal-fired power plant that provides electricity to USEC's operations. The deal allows USEC to release power back to the utilities for resale when energy prices are high and to increase operations when prices are low, which is expected to produce a $30 million benefit this summer.

Other steps that analysts consider improvements include a decision to pay half of management bonuses in stock options -- which theoretically increases management interest in ensuring higher stock values -- and the initiation in June of a buyback program for up to 10 million shares of common stock.

The company also suspended a program to develop a technology that uses lasers to separate fissionable and nonfissionable isotopes in uranium in June, incurring a nonrecurring charge of about $40 million. The company said it was abandoning the project because the possible returns weren't high enough to warrant the risks and growing financial requirements.

So what are the prospects for growth for USEC? "Our goal here for the next year or two is to pay close attention to our knitting and make sure that our core business is predictable and sustainable," said Timbers. The market for the company's single product, enrichment, is not likely to grow much in the future, according to Merrill Lynch's Fleishman.

There are no stocks comparable to USEC's, Timbers said. Although the company is often grouped with utilities, it is closer in nature to a chemical processing company, such as DuPont Co. or Union Carbide Corp., he said.

In the future, the company could pursue other opportunities related to its core business, said Timbers. For instance, the company might find investment opportunities in dealing with spent fuel from utilities, decommissioning nuclear power plants or even power generation.

In the meantime, Timbers and Shelton said they and others at USEC are enjoying the shift to the private sector.

"You get a report card at the end of every day, or -- if you're into Bloomberg [the business and stock market news service] -- every minute," Shelton said.