15 May

Aurora Cannabis Falls after It Misses Earnings Estimates

WRITTEN BY Adam Jones

Aurora misses estimates

Aurora Cannabis (ACB) reported its Q3 earnings after the market closed on May 14. The company reported a loss per share of $0.16, which missed analysts’ estimate of $0.06. The company’s stock sank almost 2.2% after the earnings release.

Aurora Cannabis Falls after It Misses Earnings Estimates

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Margins

While the company missed its bottom line, it delivered a sales growth of about 20% and also saw an incremental improvement in its gross margins. The gross margins grew to 55% from 54% in the previous quarter, which is more comparable, as that quarter also reflected recreational cannabis sales in Canada.

The company’s increased SG&A (selling, general, and administrative expenses) weighed down the bottom line. To put it in perspective, the company reported SG&A expense of $67 million, which grew from $66.3 million in the previous quarter. In its press release, the company stated, “With disciplined cost management, the Company expects SG&A costs to grow modestly over the remainder of the fiscal year.”

Overall, the company reported a net loss of $158 million as the company continued to incur expenses to expand its facility. In comparison, the company posted a net loss of $237 million in the second quarter.

Tilray (TLRY), which also reported its earnings on May 14, delivered a loss per share of $0.32. The cannabis sector ETF Horizons Marijuana Life Sciences ETF (HMMJ) was up almost 3.4%, while Canopy Growth (WEED) and HEXO (HEXO) were up 3.5% and 4.7%, respectively.

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