Aurora Hashish inventory dips as earnings present one other gross sales miss, however narrowing losses
Aurora Cannabis Inc. shares fell in after-hours trading on Tuesday after the Canadian cannabis company continued to grow less-than-expected, but bottom-line improved.
Aurora Cannabis ACB, + 2.47% ACB, +1.97% reported a loss of $ 11.9 million ($ 9.55 million), or 6 cents per share, for the first quarter, versus a loss of 90 cents per share Share in the previous year. Net sales were $ 60.1 million compared to $ 67.8 million last year. According to FactSet, analysts expected an average loss of 26 cents per share on sales of 61.2 million CAD.
It was the fourth straight quarter and the eighth of the last 10 that Aurora missed sales estimates, according to FactSet records. However, the company exceeded expectations for the bottom line for the first time since the same quarter of 2019.
Aurora’s US-listed shares fell 2.4% in after-hours trading after the release, eclipsing regular-hour gains as the stock rose 2.5% to $ 7.48. Aurora’s stocks have been struggling for more than two years amid an executive restructuring, reverse stock split, and heavy losses, having lost more than 90% of their value in the past three years, and is down 10.3% so far this year.
See also: Cannabis stocks rebound on merger and acquisition talks and recent moves towards possible reform of the U.S. ban
The current management team is hoping to cut some of the fat out to show investors a better bottom line, and is more focused on high-margin medical cannabis than the Canadian recreational market, which is leaning towards cheaper cannabis. Aurora announced Tuesday that medical cannabis sales rose 23% year over year to $ 41 million, while recreational product sales fell 44% to $ 19.1 million.
The goal for Aurora executives has been to achieve some form of profitability for some time, and the timeframe stated on Tuesday was about a year to reach adjusted earnings.
“Our strong Adjusted Gross Margins and decreasing Adjusted Ebitda Loss also provide us with a clear path to profitability through the first half of FY 2023 as we position ourselves for long-term success,” said Chief Executive Miguel Martin in a statement announced dated Tuesday.
More from Cannabis Watch: Hexo shares hit all-time lows after auditors question the company’s viability
Martin sounded noncommittal in a conference call Tuesday regarding the company’s previously stated ambitions to pursue a potential acquisition of a U.S. marijuana company.
“So if you think about our overall goal of profitability for Ebitda, we will not risk it by looking for a non-traditional investment,” he said after a private shareholder’s first question about plans for the US market. “Besides that, with the right opportunity, we have the balance sheet and financial flexibility to be opportunistic when we see the right deal.”
“I think everyone was [so] Focused on the US, that people forget that there is a huge world out there with positive cannabis laws and regulations developing, ”Martin said in response to a later question. “We talked about Germany; we talked about Britain; We talked about key markets like Australia. But the reality is that these are really big markets with huge opportunities. “
Analysts have largely warned investors to avoid Aurora as it continues to struggle. As of Tuesday afternoon, none of the 14 institutional analysts tracked by FactSet rated the stock as a buy, eight rated it as a hold and six rated the stock as an equivalent to sell. The average target price was USD 5.80, more than 20% below the current trading level.