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Aurora Cannabis Reports Loss But Narrows on Improved Sales

Canadian marijuana grower Aurora Cannabis announced in its quarterly report that it's pursuing premium product development.
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Aurora Cannabis Inc.  (ACB)  reported a wider-than-expected loss before items for its fiscal second quarter after the bell Thursday but said it is in a strong financial position and expects to “progress” to positive cash flow.

The Canadian cannabis company said its adjusted loss before interest, taxes, depreciation, and amortization was C$16.8 million ($13.3 million). Excluding restructuring costs and product return provisions, the company said it lost C$12.1 million ($9.6 million). 

Analysts surveyed by FactSet were forecasting a loss before items of C$6.9 million ($5.5 million). The company said Cannabis net revenue rose 11% to C$70.3 million ($55.5 million). Analysts had been expecting sales of C$68.5 million ($54.1 million).

“Adjusted EBITDA for the quarter, while vastly improved year over year, was impacted by several decisions that we believe will clear a path for our premium product focus and more variable cost model,” said Miguel Martin, CEO of Aurora, in a statement. “ We are confident that this will give Aurora maximum flexibility and position the organization to drive significant cash flow in the coming quarters," he added.

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The company said its chief operating officer, Allan Cleiren, is retiring, effective March 31.

Shares of Aurora rose $1.44, or 10%, to $15.91 in after-hours trading Thursday. In the regular session, shares fell 23.5% amid a broad selloff in marijuana related stocks. Until Thursday, The cannabis sector had been surging amid interest from online chat rooms and in anticipation of wider spread U.S. legalization under the Biden administration.

In addition, shares of Aurora,  Aphria  (APHA) , Tilray  (TLRY) and Canopy Growth  (CGC) have been on the move thanks to recent M&A action.

The Street's Jim Cramer has observed that while cannabis stocks can be exciting, it's important to balance speculative plays with "boring" companies, such as snack food giant PepsiCo  (PEP) .

TheStreet's Bret Kenwell has also offered commentary on the recent volatility in cannabis stocks