OrganiGram stock is a notable cannabis stock gainer in Monday’s session after OrganiGram Holdings (TSXV:OGI) (NASDAQ:OGI) reported a solid jump in revenues for the third quarter.
Good Start for the Cannabis Sector
OrganiGram Holdings has been one of the success stories of the cannabis revolution that has swept through Canada. The company has been one of a handful in the industry to make money. Hence, there was a lot of anticipation with regards to its Q3 2019 results and, luckily, the company’s results proved satisfactory as OrganiGram surprised the markets with revenues that rose by as much as seven times year-on-year.
Naturally, this news well received and OrganiGram stock soared by 5% in morning trade. It is a decidedly good start to the earnings season for the cannabis industry as OrganiGram is the first big-ticket company to report its earnings.
In the same quarter in 2018, the company reported profits of $2.8 million CAD, which came in at $0.03 per share. However, in the latest quarter, the losses stood at $10.2 million CAD, and the loss per share was pegged at $0.07. The drop in sales was the main reason behind the loss, and the company stated that it came about due to its performance in Ontario, the largest province in Canada.
Gross revenue soared nearly to $30.4 million CAD, while net revenue, excluding excise taxes, rose to $24.75 million CAD ($19.0 million USD) from $3.4 million CAD. Analysts were projecting the company to report $29.7 million CAD in revenue.
A shortage of many retail stores and the order patterns of the people in the province were cited as reasons. Raw tonnage came in at 4.60 metric tons, down from 4.99 metric tons in the previous quarter.
OrganiGram stock is up 5.20% at $6.14 on the Nasdaq. On the Canadian stock, OGI stock gains 4.90% at $7.97.
However, it is also true that this performance could be noted down as a minor bump for the company since even in the previous quarter, OrganiGram had managed to turn a profit.
The company has also been moving swiftly into new cannabis products that have proven to be popular with Canadians and inventories are rising. For instance, inventories for cannabis oil rose to 119.595 liters in April this year, which is enough to cover Canadian consumption for the next 14 months. OrganiGram Holdings managed to do sell through its inventory well, as in February alone it shed its inventory by 6,426 liters.
OrganiGram stock is one of the biggest cannabis stock gainers this year with a jump of 72%.
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