Shares of the new look
exploded Wednesday after the cannabis company reported a surprising quarterly profit in May. The report and associated estimates were complicated by the company’s high-profile merger, which was completed in the last month of the period.
Tilray stock (ticker: TLRY) was up 23% to $15.70 in trading Wednesday morning. The
ETFMG Alternative Harvest
(MJ) cannabis exchange-traded fund rose 5.1%.
Cannabis companies Aphria and Tilray closed their merger deal on May 3. It’s called Tilray, but Aphria shareholders ended up getting more than half of the combined entity, and its chief executive is former Aphria chief Irwin Simon.
Wednesday’s report is actually a quarterly report for the old Aphria business, with four weeks of Tilray results reflecting the entity after the merger. The old Tilray company reported mediocre quarterly results from March 2021 in May.
Tilray reported fourth quarter net income of $33.6 million, or 18 cents per share. Analysts expected a net loss of 3 cents per share, according to Bloomberg. Adjusted earnings before interest, taxes, depreciation and amortization of $12.3 million were below the consensus of $27.5 million, according to Bloomberg.
Fourth-quarter revenue of $142.2 million lagged estimates of $211.3 million, according to Bloomberg, although the merger may have clouded the consensus. About 47% of that revenue comes from the company’s drug distribution business, which reported revenue of $66.8 million, a 10% year-over-year decline. Net cannabis revenues, including four weeks of the former Tilray business, were up 36% to $53.7 million.
Simon said in the press release that post-merger, the company is on track to deliver $80 million in cost savings over the next 16 months.
“Early results from the new Tilray confirm that, while the global cannabis market is still in its early stages, our vision, scale, access to resources and operational excellence position us best to capitalize on this opportunity,” said Simon. “In a very short time since our business combination closed, we have transformed and strengthened Tilray, delivering solid results amid ongoing Covid-19 lockdowns and restrictions, and achieving $35 million in synergies to date.”
Write to Connor Smith at firstname.lastname@example.org