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Aphria Stock Slides On Weaker-than-expected Earnings, But Other Cannabis Shares Shine

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Aphria Inc.’s U.S.-listed shares slid 9% Tuesday before paring their losses, after the Canadian cannabis company posted weaker-than-expected revenue for its second quarter and revised down its guidance to reflect issues including a slower rollout of retail locations in Ontario.

The company swung to a net loss of C$8.2 million ($6.3 million), or 3 cents a share, in the quarter to Nov. 30, from a profit of C$54.8 million, or 22 cents a share, in the same period a year ago. The FactSet consensus was for a per-share loss of 3 cents.

Net revenue rose more than fivefold to C$120.6 million ($92.2 million) from C$21.7 million, but was below the FactSet consensus of C$129.8 million.

Chief Financial Officer Carl Merton said the company was updating guidance “to primarily reflect certain market dynamics,” including the rollout issue in Ontario, where more than 40 store openings are still pending. Other factors include a temporary ban on vape products in Alberta while it studies their impact, the higher costs of third-party supply due to the timing of a license and a slowing of growth in Germany, he said. The company is now expecting full-year revenue of C$575 million to C$625 million.

Read: Cannabis packager KushCo revenue damaged by vape crisis

Jefferies analyst Owen Bennett said overall the report supported his bullish thesis on the stock, highlighting execution and sales trends as positives.

Read now: Shorting cannabis stocks was a billion-dollar idea in 2019

Source: https://www.marketwatch.com/story/aphria-stock-slides-9-to-weigh-on-broader-cannabis-sector-2020-01-14?mod=cannabis-watch

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