The anticipation of a major sales increase and positive earnings results was hit by the crushing blow of reality when one of the largest players in the cannabis industry reported its last quarterly earnings last week.
Aphria (NASDAQ :), (TSX 🙂 had a wave of positive expectations ahead of the financial reveal last Wednesday. Stock prices were up just under 43% in the two and a half weeks before the Ontario-based pot producer revealed it for the period ending May 31, with a record high of US $ 6.13.
Aphria On NASDAQ Weekly Chart
The usual headlines were, where analysts' expectations were exceeded on most points. It posted sales of C $ 152.2 million (US $ 113.76 million) and exceeded the expected figure of approximately C $ 148.96 million (US $ 111.41 million).
The marijuana grower also posted C $ 8.6 million (US $ 6.43 million) of adjusted earnings before interest, taxes, depreciation, and amortization, a slight increase over the analyst figure associated with C $ 8.5 million (US $ 6.35 million).
But both statistics were wildly overshadowed by enormous depreciation costs. The company decreased C $ 63.9 million (US $ 47.76 million) as a result of what it described as pandemic-related impacts on its operations in Jamaica, Colombia, Argentina and the African country of Lesotho; and additional impairments of $ 27 million to revalue the convertible bonds.
The end result: a net loss of C $ 98.8 million (US $ 73.85 million) for the quarter.
The market reacted immediately, as Aphria's share fell nearly 31% last Thursday, ending at US $ 4.85.
Shares declined slightly yesterday, rising 2.83% to close at US $ 4.91 on the. Canadian markets were closed on Monday for a public holiday.
Irwin Simon, CEO of Aphria, pointed to the company's sales increases in media interviews, stating that the long-term high write-downs "make sense".
All this happens against the background of the ever-changing landscape of the cannabis industry. Aphria's high earnings in the past quarter would allow it to claim the title of Canada's largest legal cannabis retailer, a position currently held by Canopy Growth (NYSE :), (TSX :), described as the largest marijuana grower in the world. However, that decision will only be made after Canopy reports its latest financial results on August 10.
Another notable point included in Aphria's financial report: It sold C $ 65.5 million (US $ 48.96 million) in cannabis last quarter – the largest total sold to date by a Canadian marijuana grower.
52-week highlights of these 3 names
The stock prices of three marijuana companies recently peaked at 52 weeks.
Green Thumb Industries (OTC :), (CSE 🙂 closed at US $ 13.93 yesterday, slightly more than 8.4% higher on the day, and surpassed Friday's close at US $ 13.41. The company's shares have risen by just over 47% in the past year.
Trulieve Cannabis (OTC :), (CSE :), the Florida-based grower, also continues to climb, closing at US16.82 yesterday, adding 3.83% on the day, improving his 52-week high. The stock has grown by just over 61.5% in the last 12 months.
And Curaleaf Holdings (OTC :), (CSE 🙂 continues to build at its 52-week high, closing yesterday at US $ 8.98, up nearly 6.5% on the day. It increased by 14.6% in the past year.
