CannTrust Stock is making solid gains in today's early session after CannTrust Holdings (TSX:TRST) (NYSE:CTST) surprised investors by posting profit in its first quarter, compared to analysts' projection of quarterly losses.
Moreover, the company booked record revenues of C$16.9 million on enhanced production and distribution of recreational and medical cannabis products.
CannTrust Surprise Profit
CannTrust's revenue during the quarter more than doubled year-over-year to C$16.9 million. The medical products contributed to two-thirds of the revenues in Q1; recreational products accounted for a third of the revenues. However, revenue came in below the analysts' estimates of C$17.20 million.
What's interesting is that the company made a profit of C$12.8 million or 12 cents a share, easily beats wall street's estimates of a loss of 4 cents a share. This is a big surprise for CannTrust stock investors especially when most cannabis companies are currently reporting losses.
Moreover, the patient count has jumped 70% to 68,000 and harvested production soared over 400% to 9,400 kilograms. The company sold over 3,000 kg of dried cannabis at an average net price of $5.47 per gram. Cost of sales per gram sold and cash cost per gram sold stood at $3.03 and $2.77, respectively, compared to $3.08 and $2.94, respectively, in the same quarter of the last year.
Going forward, the company projects a production rate of between 200,000 kg to 300,000 kg per year by 2020.
CannTrust stock is up a whopping 8.50%, now selling at $8.32 in the morning session, on the CSE. On the other hand, TRST stock is up 9.16% to $9.25 on the NYSE.
New Letter Of Intent
Separately, CannTrust has signed an LOI with a state-owned agency Societequebecoise du cannabis, to supply recreational cannabis to the residents of Quebec province for the recreational market.
CannTrust Stock is down almost 40% from its recent peak price of $10.04. In fact, early May the stock had a sharp drop after announcing $200 million via public offerings at a steep discount to the market price.
Will the stock bounce back after the solid earnings? Share your views below.
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