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What Analysts Expect for Aphria’s Earnings


Jul. 30 2019, Published 1:49 p.m. ET

Aphria (APHA) is set to announce its fiscal 2019 fourth-quarter results after markets close on Thursday. In the quarter, analysts expect the company’s sales to grow 47% sequentially to 108 million Canadian dollars from 73.6 million. We’ve looked at APHA’s sales sequentially because the previous quarter includes a full quarter of recreational cannabis sales in Canada. APHA has beaten analysts’ sales estimates only once in the past four quarters.

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Aphria’s gross margins

In fiscal 2019’s fourth quarter, analysts expect APHA’s gross margin to narrow sequentially, to 17.3% from 18.2%. They expect its EBITDA to improve sequentially to -13.9 million Canadian dollars from -16.9 million.

Aphria is among the many cannabis companies analysts expect to report negative EBITDA in the upcoming quarter. Analysts foresee HEXO (HEXO) and Aurora Cannabis (ACB) reporting EBITDA of -9 million and -8.3 million Canadian dollars, respectively. In contrast, OrganiGram (OGI) saw positive EBITDA in its latest quarter.

Aphria’s bottom line

In fiscal 2019’s fourth quarter, analysts expect Aphria to report a net loss of 13.9 million Canadian dollars, or 0.06 Canadian dollars per share. Although it would still be at a net loss, Aphria could improve from its net loss of 49.8 million Canadian dollars, 0.2 Canadian dollars per share, in the previous quarter.

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What we are watching

Aphria has continued to recover from the corporate governance issues that have impacted the entire cannabis industry and continue to hurt investors. CannTrust was the latest to deliver a blow to investors. In Aphria’s upcoming earnings release, we hope to see developments on that front. We will also be watching for news on Aphria’s strategy for cannabis derivatives and edibles.

Why is this important?

Cannabis sector players will need to move up the value chain of cannabis products. Some of the next big things in the industry, such as infused beverages or vape pens, could expand companies’ margins.

Branding and packaging are also key to cannabis companies’ success. By fine-tuning their retail strategy, companies can strengthen in the US market. To learn more, read Why Is the US CBD Market So Attractive?


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