Cronos Group (NASDAQ:CRON) announced its fourth-quarter and full-year 2018 financial results before the market opened on Tuesday. It was the last of the five largest Canadian marijuana producers in terms of market cap to report numbers that included the first few months of Canada's adult-use recreational marijuana market.
The company reported fourth-quarter net revenue of 5.6 million in Canadian dollars, a 248% increase over the prior-year period. However, analysts polled by Zacks Investment Group expected Cronos Group to achieve revenue in the quarter of CA$7 million. Cronos Group's share price slipped around 2% in pre-market trading after the results were released.
As expected, shipments for the Canadian adult-use recreational marijuana market drove Cronos Group's sales higher during the fourth quarter. The company also attributed part of its revenue growth to higher cannabis oil sales.
Check out the latest earnings call transcript for Cronos Group.
Cronos Group posted gross profit before fair value adjustments of CA$2.5 million in the fourth quarter, up 449% year over year. However, the company announced a fourth-quarter loss of CA$11.8 million compared to a profit of CA$667,000 in the prior-year period, as increased spending took a toll on the bottom line.
Cronos Group's operating expenses in the fourth quarter soared 328% to CA$12.4 million. The increased expenses stemmed from higher professional and consulting fees associated with its deal with tobacco giant Altria, beefing up governance and internal controls, hiring new staff, and expanding research and development costs.
Cronos Group CEO Mike Groenstein stated, "We are proud of all we have accomplished in 2018 and in the fourth quarter. Over the past year, Cronos Group has diligently focused on our strategic objectives, which culminated in our transformative partnership with Altria Group, Inc." He added, "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 [intellectual property] portfolio with landmark research and development initiatives."