Heart of Pot Stocks Lineup Set to Report Earnings This Week, Tilray & Cronos Results Out, Aurora & Canopy on Deck
With the Earnings Season on the Line, Cannabis Investors Look to Heavy Hitters to Deliver in the Clutch
Pot Stocks have been under heavy pressure for the past 8 months and Friday’s large sector-wide rally in cannabis stocks had investors feeling optimistic. What spurred all that short covering and new buying late last week? Does someone know something about this week’s crucial start to the cannabis earnings season?
Cronos Group (TSX: CRON) (NASDAQ: CRON) kicked off an important earnings week for the sector after announcing its Q3 2019 financial results this morning. Cronos reported net revenue of $12.7 million, a 238% increase over the $3.8 million reported in Q3 2018. (All Cronos figures are in CDN)
The company missed the mark as the consensus amongst analysts projected Cronos would report Q3 2019 net revenue of $14.1 million. Quarter-over-quarter net revenue grew by 24% from last quarter’s $10.2 million.
Cronos attributed its revenue growth to the launch of the Canadian recreational market, increased domestic dried flower sales and the inclusion of the Redwood/Lord Jones deal which closed on September 5, 2019.
Thanks to a large one-time gain in derivative liabilities the Canadian licensed producer (LP) was able to report a net profit of $788 million or $0.53 per diluted share for the third quarter. In Q3 2018, the company reported a loss of $7.3 million or $0.04 per share. Adjusted EBITDA for the third quarter came in at negative $23.9 million compared to negative $17.8 million in the previous quarter and negative $3.2 million in Q3 2018.
The company also reported it sold 3,142 kgs of cannabis in Q3 2019, an increase over the 1,584 kgs reported in Q2 2019 and 514 kgs in the same quarter last year.
Cronos Group CEO Mike Gorenstein commented on this morning’s third-quarter results: “As demonstrated by our progress in the third quarter, we are making great strides to advance the development and diversity of our portfolio and to expand our manufacturing capabilities. We are confident that our platform strategy and focus on consumer-driven innovation will continue to differentiate Cronos Group and drive growth and value creation over the long-term.”
Shares of Cronos Group’s TSX listed stock closed trading today at $10.40, down 2.71% on the day. On the U.S. side in after-hours trading, NASDAQ listed CRON shares are currently changing hands at $7.90, up 0.89% on the session.
Tilray Sees Revenue Climb, Loss Widens in Q3
*All Tilray figures are in USD
Following this morning’s lacklustre results from Cronos Group, all eyes shifted to Tilray (NASDAQ: TLRY) which fared better. Tilray announced after market close today its third-quarter 2019 financial results.
The company reported that revenue grew to $51.1 million, a 409% increase over the prior year’s third quarter. Tilray also attributed its revenue growth to Canada’s new adult-use market in addition to its acquisition of Manitoba Harvest and overall growth in international markets. The company beat analysts’ expectations which projected Tilray would report revenue of $49 million.
However, Tilray’s net loss also increased from $18.7 million in last year’s Q3 to $35.7 million or $0.36 per share in this year’s third-quarter. Tilray missed analysts’ projections which had the company reporting a net loss of $0.30 per share.
Analysts are currently forecasting revenue of $57 million and a net loss of $0.28 per share for Tilray in Q4 2019.
Sales of hemp products stemming from the company’s Manitoba Harvest acquisition accounted for $15.7 million of Tilray’s total revenue. $15.8 million came from adult-use sales and $5.7 million from international medical cannabis sales.
Tilray’s average price per gram sold decreased from $6.21 to $3.25. The average price for a gram of recreational cannabis sold came in at $2.98. In total, Tilray sold approximately 10.9 metric tons of cannabis in the third quarter of 2019.
“Our performance in the third quarter, including solid revenue growth and sequential gross margin expansion, reflects the positive business trends we have underway. We are in the early days of seeing our strategic initiatives bear fruit — including our European expansion, brand portfolio evolution and strategic partnership product launches. We continue to expect significant growth in the fourth quarter and into 2020,” stated Tilray CEO Brendan Kennedy.
Shares of TLRY closed today’s trading session at $21.57, down 1.6% on the day. In after-hours trading, Tilray is currently changing hands at $21.08, down 2.27% on the session.
- Canopy Growth (TSX: WEED) (NYSE: CGC) will report its fiscal Q2 2020 results before the market open on Thursday, November 14, 2019.
- Aurora Cannabis (TSX: ACB) (NYSE: ACB) will report for fiscal Q1 2020 after the market close on Thursday, November 14, 2019.
Charts source: Barchart.com
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