Aurora Cannabis (TSX: ACB) (NYSE: ACB) shares jumped as much as 13% this morning in reaction to the company’s issuance of fiscal Q4 2019 revenue and production guidance. Aurora reported to investors that it expects net revenue to increase to $100 million – $107 million for the quarter. All dollar amounts in this article are in Canadian currency.
Net revenue for the previous quarter was $65.1 million. If the upper end of Aurora’s projections is met, investors can expect to see the company report a 64.36% increase in net revenue for Q4.
Aurora Cannabis also anticipates reporting positive adjusted EBITDA in the quarter to go along with better gross margins, increased kgs of cannabis sold and improved cash costs per gram produced.
The company forecasts total net revenue for full-year fiscal 2019 to come in between $249 million – $256 million.
According to FactSet, consensus analysts revenue estimates for Aurora was $112 million. Aurora’s fiscal Q4 and full-year 2019 earnings are expected to be released before September 15, 2019.
In addition to its revenue guidance, the company also estimated that production available for sale will come in at the upper end of 25,000 kgs – 30,000 kgs. Aurora’s previous production available for sale guidance was 25,000 kgs.
“Given ACB’s strong production output, we would look for this to translate to strong revenue growth in FY20, particularly as new product form factors come online in late-2Q (December) as well as continued brick and mortar rollout,” said Cowen analyst Vivien Azer. Azer lists Aurora as her top cannabis pick and rates ACB stock as outperform.
According to Cowen, Aurora’s numbers show strength in production and cultivation. The revenue miss wasn’t surprising to the analyst considering the reported monthly retail sales from Statistics Canada show the start of legal adult-use sales in Canada didn’t start off as smooth as expected. Canadian recreational cannabis sales have lagged original assumptions.
Aurora Cannabis CEO Terry Booth had the following comments on today’s guidance report:
“Our Q4 2019 guidance highlights Aurora’s continued leadership. We set out to be best-in-class cultivators, and through carefully evaluated acquisitions, that vision continues to drive exceptional results today. We are the leader in cultivation capacity, production available for sale and revenues for cannabis in the Canadian medical and consumer markets. We continue to lead the build-out of European and other international medical cannabis markets. Our success to date comes from a focus on quality, regulatory compliance, appropriate Board of Directors oversight, and delivering a profitable, low risk and sustainable business for our shareholders.”
After surging as much as 13% this morning, shares of ACB stock have cooled a bit as investors lock in profits. Aurora’s stock is currently changing hands at $8.94 per share, up 6.6% on the day.
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