Aurora Cannabis saw a surge in its shares during early trading on Friday thanks to robust sales of medical cannabis, which led to better-than-expected revenue and adjusted earnings in the company's second fiscal quarter.
At 9:51 a.m. ET, shares were trading 8.2% higher at 66 Canadian cents (48 U.S. cents), down from a morning high of C$0.71.
The Canadian cannabis company reported a year-over-year increase of 30% in net revenue for the quarter ended September 30, reaching $63.4 million. This growth was driven by a strong performance in its global medical cannabis segment.
Analysts surveyed by FactSet had projected revenue to be $46.3 million, making these results an impressive beat.
Medical cannabis sales soared by 42% during the period, totaling $43.8 million. However, consumer cannabis sales took a hit, declining by 13% to $12 million. Aurora attributed this decrease to its exit from the U.S. CBD business, as well as a strategic decision to focus on supporting premium categories. Additionally, the timing of new innovation launches impacted sales in this segment.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at $3.4 million, representing a significant improvement compared to the previous quarter when the company reported a loss of $6.2 million.
Aurora also highlighted its efforts to achieve sustainable operating costs and reduce selling, general, and administrative expenses. These initiatives have contributed to four consecutive quarters of positive adjusted EBITDA and are expected to enable the company to generate positive free cash flow by 2024.
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