Aurora Cannabis (ACB) to Post Q4 Earnings: What's in Store?

Aurora Cannabis Inc. ACB is expected to report fourth-quarter fiscal 2020 results in the early weeks of September.

In the last reported quarter, the company delivered a negative earnings surprise of 39.6%.

Q4 Estimates

For the fiscal fourth quarter, the Zacks Consensus Estimate for the bottom line is pegged at a loss of 27 cents per share. The same for revenues stands at $54.4 million, suggesting a decline of 36.3% from the year-ago reported figure.

Factors to Note

Per management, the production and sale of cannabis have been considered as essential services across Canada and Europe. The company is likely to have witnessed sustained consumer cannabis sales with the help of online ordering and home delivery. This, in turn, is likely to get reflected in Aurora Cannabis’ fiscal fourth-quarter performance.

Additionally, the company has been leveraging its coast-to-coast supply agreements to provide a wide range of premium consumer products throughout Canada. Moreover, it remains committed toward serving medical patients with sustained supply of premium products. These factors may have contributed to medical cannabis sales in the to-be-reported quarter.

Aurora Cannabis Inc. Price and EPS Surprise

Aurora Cannabis Inc. price-eps-surprise | Aurora Cannabis Inc. Quote

Ongoing improvement in the company’s production cash cost per gram might get reflected in gross margin on cannabis net revenues in the fiscal fourth quarter.

In February, the company received the EU GMP (European Union Good Manufacturing Practices) certification of its Aurora River facility with a run rate of around 30,000 kilograms annually, which will allow the company to allocate significantly higher volume of products for export markets as and when they develop. This may have benefited the fiscal fourth-quarter performance.

Aurora Cannabis has been selectively collaborating with a number of organizations, developing inventory and prioritizing its resources to make sure that consumers across Canada have access to its high-quality derivative products including edibles, vapes and infused beverages. This might have aided the to-be-reported quarter’s performance.

In the fiscal third quarter, the company did not witness any material disruption to its business due to the COVID-19 pandemic. However, the pandemic might have weighed on the fiscal fourth-quarter performance significantly.

Here’s What the Quantitative Model Suggests

Per our proven model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here.

Earnings ESP: Aurora Cannabis has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3.

Peer Releases

Some better-ranked stocks in the broader medical space that have already announced their quarterly results are Thermo Fisher Scientific Inc. TMO, PerkinElmer, Inc. PKI and West Pharmaceutical Services, Inc. WST. While both PerkinElmer and West Pharmaceuticals sport a Zacks Rank of 1, Thermo Fisher carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, which surpassed the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

West Pharmaceuticals reported second-quarter 2020 adjusted EPS of $1.25, outpacing the Zacks Consensus Estimate of 91 cents. Revenues of $527.2 million surpassed the consensus mark by 6.9%.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion surpassed the consensus mark by 0.1%.

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