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Investing.com – Cannabis producer Tilray reported a wider-than-expected loss as a surge in costs offset revenue that more than doubled in the first quarter of the year, driven by stronger international medical sales.
Tilray (NASDAQ:TLRY) rose about 2% in after-hours trading.
In the first quarter of the year, Tilray reported a loss of $1.70 a share, much worst than consensus estimates for a loss of $0.49 a share. Revenue rose 126% to $52.1 million topped estimates of $54.55 million.
The jump in revenue was driven by “cannabis sales, which experienced meaningful increases across all channels with the exception of bulk, and the inclusion of the Manitoba Harvest acquisition for a full quarter in 2020 compared to a partial quarter in the prior year,” the company said.
The miss on the bottom line comes as product costs jumped to $37.2 million from $17.3 million, weighing on margins, which fell 200 basis points to 21%.
“As evidenced by our International medical sales in the quarter, we expect this segment to demonstrate continued growth and positively impact margins. During and since the first quarter, we took significant steps to drive efficiencies across our business, enabling us to realize annualized cost savings of approximately $40 million compared to fourth quarter 2019 run rates. While the positive impact of these actions are not fully reflected in this quarter’s results, they will become more clearly evident over the course of this year,” it added.
The international medical cannabis division produced sales that exceeded Canada medical sales by 43% in the quarter.
Total cannabis kilogram equivalents sold increased 92.4% to 5,794 kilograms from 3,012 kilograms in the first quarter of 2019, but the average cannabis selling price per gram decreased to $5.28 (C$7.16) compared to $5.60 (C$7.54) a year earlier amid a shift in product and channel mix.
“To date, the (c)ompany has not experienced any material Covid-19 impacts related to its ability to serve patients and consumers around the world with medical cannabis products, adult-use cannabis products in Canada, and Manitoba Harvest hemp products,” Tilray said.
