Here’s why Tilray shares are up nearly 30% on Wednesday

on Jul 28, 2021
  • Tilray swings to an unexpected profit in the fiscal fourth quarter.
  • The cannabis company remained in loss in fiscal 2021 as a whole.
  • Shares of the Canadian firm are up nearly 30% on Wednesday.

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Tilray Inc (NASDAQ: TLRY) said on Wednesday it concluded the fiscal fourth quarter with a surprise profit. Shares of the company are up almost 30% today.

Commenting on the earnings report, CEO Irwin Simon said Tilray was exploring an acquisition of a U.S. consumer packaged goods company or an M&A with the U.S. cannabis producer focused on potential cannabis legalisation at the federal level, as per CNBC’s “The Exchange”.

Fourth-quarter financial performance

Tilray said its net income in the fourth quarter printed at $33.5 million that translates to 18 cents per share. In the comparable quarter of last year, it was stuck with $84.3 million of loss or 39 cents per share.

The Canadian company generated $142.2 million of revenue in Q4 versus the year-ago figure of $113.5 million. According to FactSet, experts had forecast $199 million of revenue and 12 cents of per-share loss.

Tilray said its cannabis revenue in the recent quarter printed at $53.7 million that represents an annualised growth of 36%. Distribution revenue tanked 10%, and net beverage alcohol revenue registered at $15.9 million in the fourth quarter after last year’s SweetWater acquisition. Wellness revenue from Manitoba Harvest, as per the Nanaimo-based firm, came in at $5.8 million in Q4.

Tilray remained in loss in fiscal 2021

For the full year, however, Tilray remained in $336 million of loss – an increase from $100.8 million in fiscal 2020. The wider loss was attributed to transaction costs worth $63.6 million related to its merger with Aphria. Another $170.5 million of non-cash unrealised loss in the recently concluded financial year came from the convertible bonds.

The pharmaceutical and cannabis company values synergies on its merger with Aphria at $35 million at the moment. Within eighteen months of completing the transaction, it expects to hit roughly $80 million in synergies.