Why Aurora Cannabis Inc (NYSE: ACB) is under pressure

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Aurora Cannabis Inc (NYSE: ACB) stock has been bearish falling over 3.9% (As of 11:07 am GMT-5; Source: Google finance) as the company posted mixed results for the first quarter of FY20. The company has reported fiscal first-quarter net income attributable to Aurora of C$12.8 million compared with C$105.5 million, in the year-ago period.

Meanwhile, the company has planned to halt construction at one of its weed-growing facilities in Denmark. The company would also delay completing the final construction and activation of its Aurora Sun facility in Canada. The construction halts were due to the company’s ongoing monitoring of demand in Canada and elsewhere around the world, and would result in C$190 million in cash savings.

Aurora has sold C$30.5 million of medical weed, recreational sales have fallen sequentially by 33% to C$30 million, which is due to slower provincial ordering. Aurora sold C$10.3 million worth of wholesale pot, mostly consisted of lower-quality product such as trim and shake, leftovers from the higher-value smokeable flower. Overall, Aurora has sold 12.5 tons of cannabis and produced 41.4 tons during the first quarter. The company’s cash cost per gram has fallen by 25% to C$0.85 from C$1.14 in the prior quarter

Moreover, the company’s Production volume has risen 43% sequentially to 41,436 kgs. The company has delivered the total gross profit of $53.7 million and gross margin on cannabis net revenue of 58%, on the back of a significant reduction in cash cost of production. Aurora’s medical patient base has increased by 8% to 91,116 sequentially. As at the date of this release, Aurora has approximately 91,408 active registered patients. The company has closed an amended and upsized $360 million secured credit facility which includes an accordion feature that enables Aurora to upsize the facility by approximately $40 million. As at the date of this release, approximately $160 million of this facility has not been drawn by the company and remains available to Aurora. ACB has  remaining 28.8 million shares of The Green Organic Dutchman Holdings Ltd. for gross proceeds of $86.5 million

ACB in the first quarter of FY20 has reported the adjusted earnings per share of 1 cents, beating the analysts’ estimates for the adjusted loss per share of 3 cents, as per Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 35.9 percent to $57.2 million in the first quarter of FY20, missing the analysts’ estimates for revenue by 21.69%.

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