Why Aphria Inc (NYSE: APHA) stock is going gangbusters today

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Aphria Inc (NYSE: APHA) stock fell 7.43% after the investors expected that the company will report disappointing Q1 2020 results though the stock rose 22% in pre-market trade after the company posted a profit for its fiscal first quarter, and not the loss which the analysts were anticipating. The company has sold more than 3,317 kg equivalents in the adult-use market and 1,354 kg equivalents in the medical cannabis market. The average retail selling price before excise tax fell to C$7.56 from C$7.66 in the prior quarter, mainly due to a higher percentage of medical cannabis sales. The company reported the net income for the first quarter of fiscal 2020 of $16.4 million compared to net income of $15.8 million in the prior quarter, and net income of $21.2 million for the same period last year. The company ended the quarter with $464.3 million of cash, cash equivalents and liquid marketable securities, to fund planned Canadian and International growth.

APHA in the first quarter of FY 20 has reported the adjusted earnings per share of 7 cents, beating the analysts’ estimates for the adjusted loss per share of 2 cents, according to FactSet consensus. The company had reported the adjusted revenue growth of 849 percent to C$126.1 million in the first quarter of FY 20, missing the analysts’ estimates for revenue of C$131 million. The revenue was below the C$128.6 million reported for the fourth quarter (declined by 2%), driven by a change in business strategy at CC Pharma to maximize profitability after recent changes in the German government’s medical reimbursement model. The company’s adjusted EBITDA rose $0.8 million to $1.0 million for the first quarter compared to $0.2 million in the prior quarter.

Moreover, APHA has delivered the adjusted cannabis gross profit for the first quarter of $15.3 million, and an adjusted cannabis gross margin of 49.8%, compared to $15.2 million with an adjusted gross margin of 53% in the prior quarter. The decline in adjusted gross margin was mainly due to lower sales of higher margin items due to the Broken Coast fire and temporary higher costs per gram.

For fiscal 2020, the company expects revenue to be in the range of about C$650 million to C$700 million. The adjusted earnings before interest, taxes, depreciation and amortization for the year 2020 are expected to be in the range of approximately $88 million to $95 million.

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