Canopy Growth posts better-than-expected quarterly earnings
Despite a smaller-than-expected quarterly loss, the cannabis company's share price is more than 17 per cent below its 2020 starting position
Shares in Canopy Growth jumped by as much as 13 per cent on Monday, after the Canadian cannabis company posted a smaller-than-expected quarterly loss.
Wall Street analysts had predicted the firm to report an adjusted loss per share of 35 cents per share for the first quarter of its new fiscal year. Instead this figure came in at 30 cents per share.
Despite the millions of people stuck at home with relatively little to do as a result of the Covid-19 lockdown, the company’s Canadian recreational net revenue fell by 11 per cent.
However, this dip was offset by growth in Canadian medical net revenue and international net revenue. Overall, while Canopy Growth’s $82.47m total revenue did fall just short analyst estimates, it stood 22 per cent higher than the year before.
Announcing the figures, chief financial officer Mike Lee said: “Following our previously announced restructuring actions, we have substantially reduced our expense and cash burn in this quarter in addition to reducing headcount by over 18 per cent since the beginning of this calendar year.”
Lee added: “Our marketing and R&D investments are being re-allocated to programs with high-return potential in order to drive sales.”
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Following the better-than-expected results, Canopy Growth’s market cap surpassed $6.6bn (£5bn, €5.6bn).
However, despite the news, the company has been unable to avoid the general downward pressures witnessed across the cannabis industry. By early-morning Tuesday trading (EDT), Canopy Growth traded down 2.73 per cent at $17.44, more than 17 per cent below its 2020 starting position.
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