Aphria stock is having one of its biggest one-day gains this year after Aphria Inc (TSX:APHA) (NYSE:APHA) posted an unexpected profit for its fiscal first quarter.
The past few months have not been particularly great for the cannabis sector, but today, there was some positive news after Aphria announced its quarterly results for Q1 2020. The company is one of the biggest players in the industry, and its financial results, released before the opening of markets, proved to be highly impressive.
One of the most important things to mention with regards to the quarterly results is that Aphria managed to record a profit for the second straight quarter.
In the quarter, Aphria generated revenues of $126.1 million CAD, up from $13.3 million CAD a year ago. Analysts were estimating the company to report $131.0 million CAD. The net revenues actually dropped slightly, but that was due to the performance of its German subsidiary CC Pharma.
The company explained that the lower revenues from CC Pharma were linked to a change in the medical reimbursement model of the German government.
After the publication of the results, Aphria stock soared significantly and gained as much as 24% to $5.40 on the NYSE.
The most important thing to keep in mind with regards to the company’s results is the fact that Aphria is managing to grow and enjoy profitability at a time when most of its rivals are struggling to stay afloat.
Aphria generated a net income of $16.4 million CAD, or 7 cents a share in the quarter, which reflects a healthy climb from the $15.8 million CAD it generated in the previous quarter. Analysts were projecting the company to report a loss of 2 cents a share.
The company sold over 3,317 kg equivalents in the adult-use market and 1,354 kg equivalents in the medical cannabis market.
The next important thing to watch out for Aphria is its new range of products that it is going to launch in light of ‘legalization 2.0’ in Canada later this year. It could prove to be the next trigger for growth for Aphria.
Aphria stock had sunk on Monday after disappointing updates from HEXO Corp (TSX:HEXO) (NYSE:HEXO) reported its fourth-quarter results, with many thinking these kinds of results would carry over to other companies as well. However, those fears proved to be misplaced when APHA delivered highly impressive results.
Featured image: Canva