Earnings season for marijuana stock has always been a period of volatility and monstrous swings in price. On May 14, Aurora Cannabis (ACB) and Tilray (TLRY) were the latest pot stocks to release its financial results. What should investors know about this cannabis company’s results?
Aurora Losses Are Growing
The company’s losses are growing faster than expected. According to its financials, the company reported losses of C$160.1 million. This is compared to C$20 million during the same period a year prior. On the flip side, the company’s revenue grew to C$75.2 million. This was significantly higher than the same period last year (C$16.1 million).
Though Aurora came in with net revenue of C$65.2 million, the street expected something more in the ballpark of C$67.6 million. With sales of medical and recreational coming in at around a 50/50 ratio, the company has shown growth in recreational compared to its previous quarter. That increase was roughly 37%.
On the production side, the company pumped out over 15,500 kg of cannabis during the quarter. It subsequently sold just over 9,100kg. Why the higher production? According to the company, the new facility in Alberta (Aurora Sky) began operations and it also expanded the facilities in Ontario. On top of this, by the end of the 4th quarter, Aurora Sky is expecting to produce somewhere in the realm of 25,000kg. It’s also important to note that the company was also able to decrease per gram production costs.
An Industry Still In Its Infancy
We previously alluded to this topic in a number of articles over the last 18 months. The industry is at the beginning phases of growth and with that will likely come these calibration phases for meeting demand.
For a company like Aurora and many others in the space working toward rapid expansion, it isn’t unlikely to see these kinds of growing pains. It’s also important to note that Aurora is putting other things in place on numerous scales. Some of the highlights the company posted in its corporate overview included:
- On March 13, 2019, the Company appointed Nelson Peltz as a strategic advisor to work collaboratively with Aurora on exploring global expansion and partnership opportunities. Management believes the Company is well positioned to pursue partnerships across a number of industry verticals and is working with Mr. Peltz and his team to assess opportunities.
- On April 16, 2019, the Company entered a binding letter agreement with Hempco to acquire all of the issued and outstanding shares of Hempco. The acquisition will strengthen the Company’s industrial hemp and CBD-from-hemp infrastructure.
- On April 24, 2019, the Company acquired Chemi, an Ontario-based laboratory specializing in high-quality analytics services for the pharmaceutical and cannabis industries. The acquisition is intended to expand the Company’s analytical services for derivative products.
- Exports to Germany and the United Kingdom, and expansion into Portugal
There’s going to be a full conference call on these results so if interested, here’s the info:
Terry Booth, Chief Executive Officer, Glen Ibbott, Chief Financial Officer, Cam Battley, Chief Corporate Officer, and Michael Singer, Executive Chairman, will host the call starting at 10:30 a.m. Eastern time. A question and answer session will follow management’s presentation.
Tilray (TLRY) Shines On Earnings
Marijuana stock earnings aren’t always bad. Look at Tilray (TLRY). On May 14th the cannabis company reported its Q1 results and shares jumped. Tilray revenues for the three months ending in March rose 195% from last year to $23 million. Sales in Canada helped.
The average selling price per gram, however, fell to $5.60 from $5.94 a year earlier.
The result was a loss of 27 cents per share, which missed Street forecasts by $0.01.
“We’ve been inundated with contacts from Fortune 500 companies who are interested in exploring partnerships with Tilray,” Kennedy told investors on a conference call late Tuesday. “And it’s a range of companies from a broad variety of industries. And generally, the deals that have been done with other companies, we generally talk to those people at some point in their process right.”
Tilray said total kilogram equivalents of cannabis sold in its first quarter ended March 31 rose to 3,012 kg. This was in comparison to Aurora’s 9,000+kg. But like Aurora, it raised its exposure to hemp by buying Manitoba Harvest for “up to C$419 million” in February.
During pre market trading on May 15th, shares of Tilray are pushing higher.