Canopy Growth Corp. reported a C$1.28 billion quarterly loss late Wednesday and missed analyst estimates for revenue, sending shares down 10% in after-hours trading.
The world’s largest cannabis company by market value, Canopy Growth /zigman2/quotes/200603886/composite CGC -2.65% /zigman2/quotes/202205609/delayed CA:WEED -2.71% reported fiscal first-quarter net losses of C$1.28 billion, or C$3.70 a share, compared with losses of C$91 million, or 40 cents a share, in the year-ago period. The more than $1 billion loss was due to the company extinguishing warrants related to the Constellation Brands Inc. /zigman2/quotes/207737284/composite STZ -0.14% investment.
Canopy Growth fired co-Chief Executive Bruce Linton not long after its previous earnings report, amid reports of unhappiness at Constellation with continuing large losses. CEO Mark Zekulin has remained at the helm of the company, but has said he expects to exit once a new leader is found.
Net revenue rose to C$90.5 million from C$25.9 million in the year-ago period, excluding excise taxes. Of that revenue, Canopy said that C$50.4 million was Canadian recreational business-to-business, C$10.6 was direct to consumer and C$13.1 million was medical cannabis sales. Canopy also brought in $10.5 million in international cannabis revenue.
Analysts surveyed by FactSet had estimated fiscal first quarter adjusted losses of C$0.38 a share on revenue of C$111.9 million. Canopy did not provide any per-share adjusted-earnings information.
The company said it sold more than 10 metric tons of pot in the fiscal first quarter, up 13% sequentially. Canopy increased its harvest 183% sequentially to 41 metric tons for the quarter.
In a statement, Zekulin said that the company has two objectives as it completed the fiscal first quarter.
“First, the company remains focused on laying the foundation for dominance in an emerging global opportunity. This means investments in developing intellectual property, building brands, building international reach, and ensuring scaled production capability for current and future products,” the CEO said in a statement.
“Second, we are fixated on the process of evolving from builders to operators over the remainder of this fiscal year, meaning that as our expansion program comes to a close in Canada, and as new value-add products come to market in Canada, we demonstrate a sustainable, high margin, profitable Canadian business.”
For the fiscal second-quarter, analysts expect losses of C$0.36 cents a share on sales of C$145.1 million.
U.S.-traded shares of Canopy Growth were down 13.8% in premarket trade Thursday. The stock has gained 16.2% this year, with the S&P 500 index /zigman2/quotes/210599714/realtime SPX -0.39% rising 13%.