Cannabis producer Cronos sinks after revenue comes up short
- Cronos missed earnings and revenue expectations for the fourth quarter.
- Shares slid more than 4% early Tuesday.
- Watch Cronos trade live.
The cannabis producer Cronos fell more that 4% early Tuesday after missing Wall Street's revenue estimate for the fourth quarter.
Cronos reported revenue of 5.6 million Canadian dollars, well below the consensus estimate of 10.8 million Canadian dollars and below all analyst estimates. Expectations for the quarter were high, with analysts surveyed by Bloomberg forecasting revenue growth of more than 500%. The company posted a loss of 0.11 Canadian dollars a share for fiscal year 2018.
"We've expanded our production footprint domestically and internationally, developed our distribution with global partnerships, launched iconic brands for the Canadian adult-use market and grown our IP portfolio with landmark research and development initiatives," said CEO Mike Gorenstein in the press release.
Cronos Group has often been at the forefront of change within the quickly growing cannabis sector.
Altria Group, the maker of Marlboro cigarettes, invested $1.8 billion in Cronos group in December 2018, giving it a 45% stake in the cannabis producer. At Cronos' current share price of about $20, Altria's investment in the company has more than doubled.
"Altria is the ideal partner for Cronos Group, providing the resources and expertise we need to meaningfully accelerate our strategic growth," Gorenstein said at the time of the investment.
In February 2018, Cronos became the first company that grows and sells marijuana to be listed on a US exchange, paving the way for publicly traded rivals Canopy Growth and Aurora Cannabis. Cronos previously traded in Canada.
Founded in 2013, Cronos Group owns and operates brands in the business of marijuana cultivation and distribution. It owns 100% of both Peace Naturals and Original BC, which are licensed to grow and sell medical marijuana.
Cronos has been one of the strongest performers on the Nasdaq since listing in February 2018, having risen 181% over the past 12 months. The stock was up 89% this year through Monday.
