Over the past few months, Aurora Cannabis (TSX:ACB) (NYSE:ACB) has gone through a lot of trouble, and Aurora stock has been punished by the market as a result. The company’s fiscal second-quarter financial results confirmed the fears of many market watchers as Aurora ended up making a substantial loss and reported a significant drop in cannabis production.
Reports Increased Losses as Revenue Tumbles
One of the biggest problems for Aurora over the past few quarters has been its spending, and in order to control this, the company has decided to write down $1 billion worth of assets from its books. The world’s second-biggest cannabis producer hopes to become profitable by drastically reducing its expenses.
In the fiscal second quarter, Aurora’s revenue came in at $56.6 million, which reflects a substantial drop of 26% from the previous quarter. The adjusted EBITDA for the period stood at $80.2 million, which was a substantial jump from the $39.7 million reported by the company in the prior quarter.
The revenue fell short of analysts’ estimates of $61.7 million. More importantly, the company’s cannabis production declined as well. In the previous quarter, Aurora Cannabis had produced 41,436 kilos of cannabis, but in the fiscal second quarter, it produced 30,691 kilos.
However, Aurora stock is up by 2% at $1.49 at the time of writing.
Many investors seemed to have anticipated these disappointing quarterly results, as evidenced by the selloff in Aurora stock, resulting in a more than 30% drop over the past week. The cannabis industry has suffered from industry-wide issues, of which Aurora has spoken about before. Aurora Cannabis has cited the oversupply in product and the slow rollout of stores in different provinces as two important factors behind its troubles.
Today, Aurora reiterated this. It said it expects its operations to be hampered by the “previously mentioned industry headwinds” in the next quarter. Aurora, therefore, expects its growth to be only marginal, if it grows at all.
Aurora stock made a new low of $1.43 in today’s trading session.
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