Maybe it's the buzz from sampling some of its product, but Canadian cannabis company Aphria (APHA) - Get Report was a rare flicker of light in an otherwise down market on Wednesday as a surprise fiscal third-quarter profit and sales that were double analysts’ forecasts sparked investors to push the stock up as much as 20%.
Shares of Aphria rose to a two-month high of $4.42 in premarket trading in New York on Wednesday after the Leamington, Ontario-based company said that it swung to earnings of C$4.96 million ($3.53 million), or 2 cents a share, vs. a loss of C$108.27 million, or 43 cents a share, a year ago.
Analysts polled by FactSet were expecting a loss of 4 cents a share. Revenue rose to C$144.42 million ($102.8 million) from C$73.58 million, beating the FactSet consensus of C$130.9 million.
The stock settled back down after the market open, trading up 7.47% at $5.47.
While many might expect cannabis companies to be faring well in the pandemic as consumers stock up on their medicinal herbs and related products, producers and distributors have been struggling amid a glut in supply and a falloff in demand, particularly on the retail side as consumers remain at home amid a closed economy.
Shares of Aurora Cannabis (ACB) - Get Report took the opposite path this week after the embattled Canadian marijuana producer said it approved plans for a 1-for-12 reverse stock split, after the company’s shares traded below $1 for more than 30 days.
Aurora on Monday announced the reverse stock split, which is scheduled for May 11, as a way to both regain compliance with rules of the New York Stock Exchange, which require action if a stock trades below a buck for 30 days, and also as a way to boost liquidity.