Shares of the new-look Tilray exploded on Wednesday after the cannabis firm reported a surprise May quarter profit. The report and related estimates were complicated by the company’s high-profile merger, which closed in the final month of the period.
Tilray stock (ticker: TLRY) jumped 23% to $15.70 in Wednesday morning trading. The ETFMG Alternative Harvest (MJ) cannabis exchange-traded fund was up 5.1%.
Cannabis firms Aphria and Tilray closed their merger deal on May 3. It’s called Tilray, but Aphria shareholders ended up with more than half of the combined entity and its chief executive is former Aphria chief Irwin Simon.
The report on Wednesday is actually a quarterly report for the legacy Aphria business, with four weeks of Tilray results reflecting the post-merger entity. The legacy Tilray business reported lackluster March 2021 quarter results in May.
Tilray reported fiscal fourth-quarter net income of $33.6 million, or 18 cents a share. Analysts were anticipating a net loss of 3 cents a share, according to Bloomberg. Adjusted earnings before interest, taxes, depreciation, and amortization of $12.3 million was short of consensus at $27.5 million, according to Bloomberg.
Fourth-quarter revenue of $142.2 million fell short of estimates at $211.3 million, according Bloomberg, though the merger may have muddied the consensus. About 47% of those sales come from the company’s drug distribution business that reported sales of $66.8 million, down 10% year-over-year. Net cannabis revenue, which includes four weeks of the former Tilray business, jumped 36% to $53.7 million.
Simon said in the earnings release that the post-merger company is on track to deliver $80 million in cost savings in the next 16 months.
“Early results from the new Tilray affirm that, while the global cannabis market remains in its early stages, our vision, scale, access to resources and operational excellence position us optimally to capitalize on the opportunity,” Simon said. “In a very short period of time since our business combination was finalized, we transformed and strengthened Tilray, delivered solid results amid continued Covid-19 lockdowns and restrictions and achieved $35 million in synergies to date.”
Write to Connor Smith at [email protected]
