Canopy Growth says its loss came in smaller than expected in Q2

Canopy Growth says its loss came in smaller than expected in Q2
Written by:
Wajeeh Khan
November 9, 2020
  • Canopy Growth says its loss came in smaller than expected in Q2.
  • The Canadian company reports £79.40 million of revenue.
  • Canopy's market share expanded by 200 basis points in Q2.

Canopy Growth Corp (TSE: WEED) said on Monday that its loss in the fiscal second quarter came in smaller than expected. The company also reported revenue that topped analysts’ estimates.  

Shares of the company opened about 13% up in the stock market on Monday but lost almost half of the intraday gain in the next hour. Including the price action, Canopy Growth is now exchanging hands at £19.27 per share after recovering from a year to date low of £8.30 per share in March.

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The stock had started the year at a per-share price of £15.33. Learn more about why do prices rise and fall in the stock market.

Canopy Growth’s Q2 financial results analysts’ estimates

Canopy Growth said that its loss in the second quarter came in at £18.18 million that translates to 5.28 pence per share. In the same quarter last year, it had reported £151.94 million of net income or 14.67 pence per share.

In the quarter that concluded on 30th September, the Ontario-based company posted £79.40 million of revenue versus the year-ago figure of £50.24 million. In the prior quarter (Q1), Canopy Growth had revealed a 22% year over year growth in revenue, as per the report published in August.

According to FactSet, analysts had forecast the company to print £69.31 million of revenue in the recent quarter. Their estimate for loss per share stood at a higher 21.71 pence per share. In an announcement last week, Canopy said that from November 13th, it will switch its U.S. stock exchange listing to Nasdaq Global Select Market.

CFO Mike Lee’s remarks on Monday

CFO Mike Lee commented on the financial report on Monday and said:

“We saw another quarter of improvement in our operating expense ratio while our marketing and R&D investments are being re-directed to drive sales. Importantly, our end-to-end review has identified cost savings opportunities in the range of $150-$200 million across cost of goods sold, general and administrative expenses, and inventory, and efforts are underway to quickly capture value.”

Canopy Growth also said on Monday that its market share expanded by 200 basis points in the recent quarter.

The Canadian company performed fairly downbeat in the stock market last year with an annual decline of close to 30%. At the time of writing, Canopy Growth Corp. is valued at £7.13 billion.