Brenda O’Farrell
Investing.com – In a sector that has come to view not-bad news as great news, shares of Canopy Growth Corp (TSX:WEED) were up about 16% shortly before 1 p.m. on Friday, trading at $30.25, hours after the world’s largest cannabis grower unveiled an earnings report that contained a loss that was smaller than expected.
The marijuana company based in Smith Fall, Ont., posted a third-quarter report that headlined $123.8 million in net revenue with an adjusted EBITDA loss of $91.7 million. Analysts polled by Bloomberg reportedly had expected $105.4 million in revenue with a corresponding adjusted earnings before interest, tax, depreciation and amortization loss of $110 million.
The company also outlined it had been able to firm up its bottom line by keeping expenses in check, posting a 14% drop in operating costs in the third quarter.
Canopy’s new chief executive officer, David Klein, said he is focused on defining a pathway to profitability, pledging to do a thorough review of all of Canopy’s growing facilities.
The former chief financial officer of major Canopy stakeholder Constellation Brands (NYSE:STZ), Klein took over the helm of the cannabis grower several months after the ouster last year of high-profile Canopy founder Bruce Linton. Constellation brass made their disapproval of Canopy’s large losses known as the pot grower ramped up production in the latter half of 2018.
On Friday, the market reacted favourably to the latest Canopy earnings report, as reflected by a bump in the share price of several marijuana growers.
In early afternoon trading shares of Hexo Corp (TSX:HEXO) were up more than 12%, while Aphria Inc (TSX:APHA) and Cronos Group Inc (TSX:CRON) were both up just over 4% on the S&P/TSX Composite. Tilray Inc (NASDAQ:TLRY) shares were also trading up more than 3.5% on the Nasdaq.