question archive Aurora Cannabis sales fall 26% in Q2, predicts 'modest to no growth' aheadJeff LagerquistYahoo Finance Canada Feb
Aurora Cannabis sales fall 26% in Q2, predicts 'modest to no growth' aheadJeff LagerquistYahoo Finance Canada Feb
Subject:BusinessPrice: Bought3
Aurora Cannabis sales fall 26% in Q2, predicts 'modest to no growth' aheadJeff LagerquistYahoo Finance Canada
Feb. 13, 2020, 6:13 a.m
Aurora Cannabis (ACB.TO)(ACB) reported $56 million in net revenue in its fiscal second quarter of 2020, a 26 per cent decline versus the previous quarter.
Toronto-listed shares climbed 4.69 per cent to $2.02 at 9:59 a.m. ET on Thursday. Aurora's Toronto-listed stock hit a fresh 52-week low on Wednesday, adding to a nearly 80 per cent decline over the past year.
Looking ahead to the third quarter, the company warned of "modest to no growth" relative to fiscal Q2's cannabis revenue.
Earlier this month, Terry Booth stepped down as chief executive officer after seven years in the top job. Executive chairman Michael Singer is filling the role on an interim basis.
The boardroom shuffle was coupled with the elimination of nearly 500 staff, including 25 per cent of all corporate positions. Aurora had about 3,400 staff in Canada and overseas prior to the cuts. The move is expected to reduce quarterly "selling, general and administrative" to between $40 and $45 million.
Aurora also said it will cut its capital spending to $100 million for the second half of fiscal 2020, and reducing plans to spend on information technology projects, sales and marketing initiatives, travel and entertainment and professional services which do not provide an immediate impact on its revenue.
The Feb. 6 announcement also revealed plans to take a writedown of between $190 million and $225 million on certain intangibles and property, plant and equipment, and plans to writedown $740 million to $775 million in goodwill. Aurora had about $156 million left in cash, excluding $45 million of restricted cash as of Dec. 31.
Required: Why did Aurora's share price fall? Assume efficient markets, and consider both economy-wide and firm specific factors in your answer.
