uploads///CRONs Loss Per Share Estimates

Cronos Group’s Bottom Line Is Expected to Bleed More

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May. 3 2019, Published 8:11 a.m. ET

Core profitability

Cronos Group (CRON) is expected to report sales growth of 140% year-over-year. However, the company is expected to report a negative EBITDA of 5.6 million Canadian dollars. Compared to the same quarter a year ago, the EBITDA decline is expected to widen from -1.6 Canadian dollars. Sequentially, the EBITDA is expected to improve from -10.8 million Canadian dollars.

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What’s driving the declines?

The EBITDA is expected to remain depressed due to increased costs related to the expansion. The expansion is expected to be beneficial in the future. The negative EBITDA isn’t surprising for Cronos Group and other cannabis companies (MJ) like Canopy Growth (WEED), CannTrust (CTST), and Aphria (APHA). The companies continue to spend more than their current revenues.

The loss is expected to impact the bottom line as well. Cronos Group is expected to report a net loss of 9.9 million Canadian dollars compared to the net loss of 1.3 million Canadian dollars a year ago. The net loss would translate into a loss per share of 0.04 Canadian dollars. In the fourth quarter of 2018, the net loss was 18.9 million Canadian dollars.

Cronos Group closed at 22.5 Canadian dollars on May 2. The company has lost almost 15% from its peak in February this year. If the company misses the expectations, the stock should see more selling pressure after the earnings.

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