Aphria’s 3Q Sales and EPS Miss Estimates; Shares Plunge 14%

Aphria fell 14% on Monday after the cannabis company posted a wider-than-expected loss and lower revenue than forecasted in the third quarter.

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Aphria (APHA) reported an adjusted loss per share of C$0.15 which was larger than analysts’ expectations for a per-share loss of C$0.05. Revenue in 3Q rose 6.4% year-on-year to C$153.6 million but missed analysts’ estimates of C$161.3 million.

Revenue from Aphria’s cannabis operations fell 7.8% to C$51.7 million. Sales for its SweetWater beverage division were C$14.8 million in the first full quarter since the company was acquired in November. (See Aphria stock analysis on TipRanks)

Aphria’s CEO Irwin D. Simon said, “Our global team executed well in the very fluid, ongoing COVID-19 operating environment. We proactively managed our expenses and maintained our positive adjusted EBITDA for the third quarter of fiscal 2021. The duration and impact of lockdowns across many of the regions we operate in, particularly in Canada, were greater than we initially anticipated for the cannabis industry and our business; however, we believe Aphria remains well-positioned with our leading brands and market share to experience a robust increase in our top-line as the market improves.”

“We remain excited with the opportunities created for both Aphria shareholders and Tilray stockholders in completing our proposed business combination with Tilray, and believe that together, we will create one of the strongest global cannabis and consumer packaged goods companies in the world,” Simon added.

Last week, Alliance Global Partners analyst Aaron Grey reiterated a Buy rating on the stock with a C$24 price target (18% upside potential).

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating, based on 4 Buys and 3 Holds. The average analyst price target of C$24.48 implies upside potential of about 40% to current levels. Shares have almost doubled year-to-date.