Cronos Group Reports Earnings Beat, Misses Revenue Estimates For Q4

Cronos Group Inc. CRON on Monday reported its earnings for the fourth quarter of the financial year of 2019.

What Happened

The cannabis company posted net revenue of $7.3 million, up 41.3% from the $4.3 million posted in the similar quarter last year. The revenue was 37% lower than the FactSet analyst average estimate of $11.6 million.

The diluted earnings per share for Q4 was at 16 cents, up 21 cents year-on-year from a loss of five cents per share posted in 2018 Q4. The EPS also beat the FactSet analysts estimate of a loss per share of three cents.

The increase in revenue included a non-cash gain of $118.8 million "from the non-cash change in the fair value of financial derivative liabilities" associated with the $1.8 billion investment from tobacco giant Altria Group Inc MO.

Cronos Group said that as a "designated essential business," it remained operational during the novel coronavirus (COVID-19) pandemic, but "may see an impact on certain parts of its business and operations such as operational capacity or supply chain delays," going forward.

"Cronos Group ended 2019 with a strong foundation and balance sheet, and a clear focus on achieving our core strategic initiatives to drive long-term, sustainable growth," the company's CEO Mike Gorenstein said in a statement.

"Importantly, we expanded our Canadian distribution footprint, broadened our brand portfolio, enhanced our global supply chain capabilities and advanced our breakthrough intellectual property and research and development initiatives."

Price Action

Cronos shares closed 0.79% higher at $6.34 on Monday.

The stock was volatile following the earnings report in the after-hours session surging as high as $6.55 per share in the after-hours market but ultimately ended the session slightly lower at $6.30 per share.