Aphria Inc. shares surged more than 18% in the extended session Thursday after the cannabis company reported a surprise profit and more sales than anticipated by analysts.
The company reported fiscal fourth-quarter net income of C$15.8 million, or 5 cents a share, compared with losses of $C5 million, or 43 cents a share, in the year-ago period. Revenue rose 75% to C$128.6 million, net of excise taxes, compared with the prior quarter.
Aphria said it sold 5.5 metric tons of pot, with a cash cost per gram of C$1.35. Of its C$128.5 million in revenue, C$18.5 million was from sales to the adult recreational market in Canada.
Analysts surveyed by FactSet had estimated revenue of C$104 million. For the fiscal first quarter, analysts model revenue of C$113.7 million.
“It’s a new day at Aphria. Our team’s solid execution across key areas of our business resulted in strong adult-use revenue growth and a profitable fourth quarter,” Chief Executive Irwin Simon said in a statement. “Over the last six months, our organization identified immediate priorities to help generate substantial progress near-term and long-term.
The results benefited from C$50 million the company received from Green Growth Brands Inc. GGBXF, -5.21% GGB, +0.00% after that company’s hostile takeover bid failed. Green Growth launched the bid after short-sellers released a report that called into question several of the company’s assets and pointed out alleged wrongdoing by former executives related to several acquisitions.
Aphria said that it will receive another C$39 million in November from Green Growth.
Aphria also issued fiscal 2020 guidance, saying that it expects revenue net of excise taxes to be roughly C$650 million to C$700 million, with its distribution revenue representing about half of the total.
Aphria highlighted the company’s deal with vape maker Pax Labs Inc. and touted the fact that the company has C$571 million in cash and equivalents in the bank.
Aphria APHA, -3.35% APHA, -3.63% stock has fallen 12.9% this year, with the S&P 500 index SPX, -0.90% rising 14.6%. The pot sector overall is having a weak summer as scandals mount.
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