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Aurora Cannabis stock drops after earnings, as revenue misses revised target



Aurora Cannabis Inc. shares declined in the extended session Wednesday, after the company missed revenue expectations even after dropping its forecast.

The Edmonton, Alberta-based Aurora

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     ACB, + 3.34%

ACB, + 3.15%

announced a fiscal fourth-quarter net loss of C $ 2.26 million on a net revenue of C $ 98.94 million, with an adjusted Ebitda loss of C $ 11.7 million ($ 8.9 million). In a separate filing, Aurora said its net loss attributable to common shareholders was less than $ 200,000, and less than a penny a share.

Analysts surveyed by FactSet had an estimated adjusted loss of C $ 0.06 and a share on revenue of C $ 108 million. Last year in the same quarter, Aurora reported a net income of C $ 79.9 million, or 17 cents a share, on a net income of C $ 19.1 million. Aurora shares declined about 9% in after-hours trading following the results.

Earlier this year, Aurora executives said the company was on track to achieve a sort of profitability: On an adjusted basis, the company would post a positive figure for earnings before interest, taxes, depreciation and amortization. Aurora adjusts its Ebitda figure for biological asset transformation, among other things.

But in August, the company appeared to walk back to the figure, saying in a news release that it was “on track” to achieve positive adjusted Ebitda without mentioning a specific time frame, as it had previously. In the outlook provided in Wednesday's announcement, Aurora even stopped pointing to that adjusted profitability, saying instead that it “expects adjusted Ebitda to continue to improve in the future due to expected revenue growth, improvements in gross margin and prudent SG&A growth.” [19659002] Prior to the August guidance, analysts polled by FactSet had an estimated fourth-quarter revenue of C $ 111.9 million. In the August update, the company tamped down expectations, telling investors it was now on track to book sales of C $ 100 million to C $ 107 million, net of excise taxes, but it failed to hit that mark in the end.

"In 2019, Aurora has taken its place as the global leader in cannabis production, research, innovation and international market development," Chief Executive Terry Booth said in Wednesday's announcement. “We are executing on all our strategic priorities.”

Aurora plans to hold a conference call with executives at 9 a.m. Eastern time Thursday.

Aurora's fourth-quarter results arrive amid a swath of disappointing top-line results from Canada's largest pot companies. Difficulties growing and packaging the plant have contributed to the lack of startup for legal recreational cannabis in Canada, as it has a relatively small number of retail locations in provinces such as Ontario, the most populous.

Much like other cannabis companies that purchased cultivation and other manufacturing assets ahead of recreational legalization last October, Aurora carries a substantial amount of goodwill on its balance sheet, roughly C $ 2.4 billion according to its third-quarter financial results.

Although Aurora sold its stake in Green Organic Dutchman Holdings Ltd. It is difficult to determine when and if the company will write down the value.

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     TGOD, + 5.02%

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for C $ 86.5 million on Sept. 4, those shares were still on the books during the June quarter. The company's bottom line has been hit hard by the value of a number of its investments in other cannabis companies, such as Dutchman, and swings in the sector.

US-traded shares of Aurora have gained 30% this year, with the S&P 500 index

                            
                            
                                  
      
      
      
      
      
      
      
                                  
                                     SPX, + 0.72%

rising 18.9%.


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