Aphria stock is leading the cannabis sector lower after Aphria Inc (TSX:APHA) (NYSE:APHA) reported lower-than-estimated Q2 revenue.
2019 was a singularly difficult year for the cannabis industry, and most of the companies in the sector saw their stock prices drop significantly. In that regard, Aphria was no exception; however, in a new development, Aphria stock declined this morning after it posted a loss in the fiscal second quarter of 2020.
Swung to Net Loss
The net losses for the quarter stood at C$7.9 million, which worked out to C$0.03 per share. In the prior-year period, Aphria had made a profit of C$54.8 million or C$0.22 per share. The company’s Tier 3 passive investment portfolio was responsible for this impact on the bottom line.
However, it is also important to keep in mind that the company managed to grow its net revenue significantly to C$120.6 million. While this marked a major improvement from the year-ago period, the revenue figure for the quarter ended up missing analysts’ estimates.
Analysts were projecting the company to report a loss of C$0.03 a share on revenue of C$129.8 million.
At the time of writing, Aphria stock is down 5% at $5.18 on the NYSE.
One of the bigger positives was the fact that the revenue from the adult-use market rose by as much as 46% year-on-year.
For fiscal 2020, the company projects revenue of C$575 million to C$625 million, topping analysts' estimates of C$571 million.
The Chief Executive Officer, Irwin Simon, spoke about the company’s capabilities and the expansion in the international markets: “We are continuing to expand our capabilities internationally with solid progress during the quarter in Germany and South America and look to monetize non-core assets.”
Simon went on to say that he is confident about the company’s position in the market and the capability of generating profitable growth.
Despite today's fall, Aphria stock is still up 10% over the past week.
Featured image: Canva