Aphria Trading in Red, Two Days After Q4 Earnings Report

On August 1st, the Q4 Aphria earnings report was posted. Despite revenue increasing, its loss nearly doubled. After the report was released, the APH stock dropped more than 8%.

Two days later, the stock is still falling.

Aphria Earnings Report: Important Figures

On Wednesday, cannabis company Aphria reported its financial results for its 2018 fourth quarter, as well as its year-end results.

In the fourth quarter, Aphria saw its revenue increase by 110.5%. A year ago, revenue was at $5.7 million. In the third quarter of this year, it was at $10.3 million. Now it has shot up to $12 million.

However, there were some losses reported in the Aphria earnings report. In the quarter that ended May 31st, Aphria saw a net loss of $5 million. A year ago in the same quarter, Aphria only saw a net loss of $2.6 million.

For the full year, the cannabis company's net income increased, and revenue for 2018 increased 81%.

But when the news of the company's net loss hit the market, the stock plunged—and it's still declining.

The Aphria Stock (TSX:APH)

According to Yahoo Finance, as of 12:53 p.m. EDT, Aphria is down 0.95%. Earlier in the day, the stock was down more than 1%.

Explaining the Net Loss

Despite the stock falling after the results were released, it makes sense that Aphria's loss widened. The same thing happened to Canopy Growth (TSX:WEED), which had revenue surge in its last quarter but net loss widened.

Both are occurring because these two companies are gearing up for cannabis legalization, trying to increase production so they can be leading cannabis suppliers in October.

Stay Optimistic

It's easy to be discouraged by the fact that Aphria's net loss nearly doubled in Q4, but remember that once cannabis is legalized, and revenue comes in from recreational cannabis, reports claim that good things will come to cannabis producers.