While today’s biggest winner in the cannabis space was Tilray (NASDAQ: TLRY), which surprised analysts with better-than-expected sales and revenues, the same could not be said for the second largest marijuana company in the world. Aurora Cannabis (TSE: ACB)(NYSE: ACB) was outclassed by it’s smaller competitor today as the business reported solid revenue figures alongside an increase in losses that has some worried.
Releasing their earnings report on late Tuesday as investors waited in suspense, Canadian-based Aurora reported a third-quarter loss of C$160.1 million, or around 16 cents a share. One year ago, Aurora only lost C$20 million, or 4 cents a share. While revenue increased from $16.1 million to $75.2 million, the increase in losses for the company is a growing trend among cannabis companies who have largely failed to be profitable despite their strong growth figures.
“I’m exceptionally proud of our company and team as Aurora continues to deliver on our domestic and international growth strategy. We achieved solid revenue growth and strong operating results in a quarter proven challenging across the industry. We are laser focused on building a long-term sustainable business,” said Terry Booth, Aurora’s CEO. “During the quarter, we formally welcomed Nelson Peltz a key strategic advisor. He has been incredibly engaged, collaborative, and strategically focused on assisting our pursuit of growth in global markets and with mature companies in adjacent industries.”
However, with a significant portion of Q1 losses coming from Aurora’s strategy of aggressive expansion and acquisitions, future quarters in 2019 and 2020 are expected to be much more profitable. In terms of its asset portfolio, Aurora has a number of top-of-the-line production facilities now operating at full capacity. Currently, the company is the number one grower in sheer quantity of cannabis in the world, beating it’s rival Canopy Growth Corp (TSE: WEED)(NYSE: CGC). On the other hand, Aurora doesn’t have a major partnership under its belt, whether that’s been an intentional strategy or not. For many companies looking to enter the CBD-beverage market, major partnerships with brewers and alcohol companies give them a competitive edge in this area.
In after-hours trading, shares of Aurora on the NYSE dipped two percent, a figure which is expected to grow once the markets open up again on Wednesday. Aurora has so far gained around 37 percent in the past year, while the S&P 500 has increased only 3.8 percent in comparison. This has beaten out cannabis-based indexes such as the Horizons Marijuana Life Sciences ETF, which has gone up 14 percent in the past year.
Aurora Cannabis Company Profile
Aurora Cannabis Inc is a Canada-based company engaged in the production and distribution of medical cannabis. The Company is vertically integrated and horizontally diversified across every key segment of the value chain, from facility engineering and design to cannabis breeding and genetics research, cannabis, and hemp production, derivatives, home cultivation, wholesale and retail distribution. The Company’s purpose-built facilities which integrate technologies across all processes are defined by automation and customization. The Company has a funded capacity of more than 500,000 kilograms per year as well as sales and operations in 24 countries worldwide. – Warrior Trading News