Aurora Cannabis Inc (NYSE: ACB) is having a relatively strong start to the trading session in the pre-market hours this morning, and for good reason. The company released guidance for the second fiscal quarter of 2019 based on preliminary results. Of course, the news excited investors, sending the stock upward. Today, we’ll talk about:
- The guidance update;
- what we’re seeing from ACB stock as a result; and
- what we’ll be watching for ahead.
ACB Announces Guidance Update
As mentioned above, Aurora Cannabis is having an incredibly strong start to the trading session this morning after the company provided guidance for the second fiscal quarter of 2019. In a press release issued this morning, the company provided an update with regard to expectations for the earnings report that is set to be published on February 11, 2019.
In the release, the company said that based on preliminary results, it is expecting for Q2 revenues to come in between $50 million and $55 million. That compares well to the $11.7 million in the same quarter one year ago and the $29.7 million reported in the previous quarter. In fact, that works out to be 327% year over year growth and 68% quarter over quarter.
In the release, ACB said that the growth in revenue is ultimately the result of the groundwork it laid that put it into a good position to take advantage of the now-booming, adult use cannabis market in Canada. The company also pointed to its 71,000 medical cannabis patients in Canada as well as a growing international market.
The company also said that it is continuing to increase production. In fact, today, the company is producing about 100,000 kg / annum, strong growth from the 70,000 kg / anum reported in November 2018. By the end of the first calendar quarter of 2019, the company expects that figure to grow to 150,000 kg / anum.
In the release, ACB also prepared investors for strong growth in margins. The company said that the introduction of higher-margin products like softgels and vape-ready CBD oil cartridges, it is expecting to see sustained strong growth margins throughout fiscal 2019.
In a statement, Terry Booth, CEO at ACB, had the following to offer:
Aurora continues to execute effectively across all market segments, as demonstrated by its revenue growth anticipated to exceed 68% as compared to last quarter, supported by continued strong performance in the Canadian adult consumer use market… Our consistent and high-quality production continues to significantly ramp up as expected, fueling even further growth. Going forward, we see sustained strong demand from the adult usage market, as evidenced by public statements from the Canadian provinces, as well as strong patient-driven demand for medical cannabis in Canada and abroad. These factors, together with our focus on disciplined management of operating expenses, and our growing portfolio of higher margin products, put us in a position to rapidly achieve positive EBITDA within the next two quarters.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Aurora Cannabis, the news proved to be positive. After all, with the press release, the company has set the stage for a strong second fiscal quarter and 2019 calendar year. So, it’s not surprising to see that excited investors are pushing the stock upward in the market today. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:35), ACB is trading at $5.37 per share after a gain of $0.11 per share or 2.09% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on ACB. In particular, we’re interested in following the story surrounding the company’s continued work to expand by taking advantage of the recently opened adult use market in Canada as well as changing global regulations like what we’re seeing in the United States with the Farm Bill. Nonetheless, we’ll continue to keep an eye on the story and bring the news to you as it breaks!
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