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Aurora Cannabis share declines after earnings, as revenue misses revised target

Aurora Cannabis Inc. shares went down in the extended session on Wednesday after the pot company missed revenue expectations even after dropping the forecast.

Edmonton, Alberta-based Aurora

ACB, + 3.34%

ACB, + 3.15%

announced a $ 4.26 million net loss on $ 98.94 million in net income, with an adjusted loss from Ebitda of $ 1[ads1]1.7 million ($ 8.9 million). In a separate filing, Aurora said the net loss attributed to ordinary shareholders was less than $ 200,000, and less than a penny per share.

Analysts surveyed by FactSet had estimated adjusted losses of $ 0.06 per share on revenue of $ 108 million. Last year, in the same quarter, Aurora reported net income of $ 79.9 million, or 17 cents per share, on net income of $ 19.1 million. Aurora shares were down 9% in trading after hours after results.

Earlier this year, Aurora executives had stated that the company was on track to achieve some kind of profitability: On an adjusted basis, the company would post a positive figure for earnings before interest, taxes, depreciation and amortization. Aurora adjusts, among other things, the Ebitda figure for biological management.

But in August, the company appeared to decline, saying in a news release that it was "on track" to achieve positively adjusted Ebitda without mentioning a specific timeframe, as it had done previously. In the outlook given in Wednesday's announcement, Aurora even stopped pointing to adjusted profitability, saying instead that it "expects adjusted Ebitda to continue to improve in the future due to expected revenue growth, gross margin improvements and sound SG&A growth. " [19659002] Prior to the August guidance, analysts polled by FactSet had estimated fourth-quarter revenue of $ 111.9 million. In the August update, the company lowered expectations, telling investors it was now on track to post sales of between $ 100 and $ 107 million, net of tax, but failed to hit that mark in the end.

"In 2019, Aurora took its place as a world leader in cannabis production, research, innovation and international market development," CEO Terry Booth said in Wednesday's announcement. "We carry out all our strategic priorities."

Aurora plans to hold a conference call with leaders at 9pm Eastern time on Thursday.

Aurora's fourth-quarter results come amid a host of disappointing top-line results from the largest Canadian pot companies. Difficulties in growing and packing the plant have contributed to the glowing start of legal recreational cannabis in Canada, and so have the relatively small number of retail outlets in provinces such as Ontario, the most populous.

Like other cannabis companies that purchased cultivation and Other Production assets prior to the legalization of recreational activities in October last year, Aurora has a significant amount of goodwill on its balance sheet, approximately $ 2.4 billion, according to its third-quarter financial results. It is difficult to determine when and if the company will write down the value.

Although Aurora sold its stake in Green Organic Dutchman Holdings Ltd.

TGOD, + 5.02%

TGODF, + 4.86%

for $ 86.5 million on September 4. These shares were still on the books during the June quarter. The company's bottom line has previously been influenced by the value of a number of investments in other cannabis companies, such as the Dutch, and fluctuations in the sector.

US-traded shares in Aurora have gained 30% this year, with the S&P 500 index

SPX, + 0.72%

increasing 18.9%.

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