Some investors apparently thought that Aurora Cannabis (NYSE:ACB) would report some good news in its results for the fourth quarter of fiscal 2020 ended June 30, 2020. Shares of the Canadian cannabis producer jumped nearly 16% on Tuesday ahead of the company's Q4 update.

But there wasn't any good news. On the contrary, Aurora's results were chock-full of negatives from the top line to the bottom line. There was one number in the company's update that was the scariest of them all.

Shadow of a dollar sign on top of a pile of cannabis leaves.

Image source: Getty Images.

The bad -- but not the worst -- news

Aurora provided a sneak peek at its ugly Q4 results earlier this month. Investors were therefore already bracing for the company to write off 1.8 billion in Canadian dollars in goodwill impairment charges, which is exactly what Aurora did.

It also came as no surprise that Aurora Q4 net revenue and cannabis net revenue declined from the previous quarter. The company reported total net revenue in the fourth quarter of CA$72.1 million, down nearly 5% from Q3. Aurora recorded cannabis revenue in Q4 of CA$67.5 million, a 3% quarter-over-quarter drop.

The company didn't release its net loss in the business update a few weeks ago. However, investors anticipated a whopper -- and that's what they got. Aurora posted a Q4 net loss from continuing operations of nearly CA$1.9 billion. In the previous quarter, the cannabis producer recorded a net loss of "only" CA$136.1 million.

Aurora generated negative adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of CA$34.6 million. The company has a long way to go to achieve positive adjusted EBITDA as it has committed to do by fiscal 2021 Q2. However, there was a sliver of good news: Aurora's Q4 result wasn't as bad as its negative adjusted EBITDA of CA$50.4 million in the third quarter. 

Aurora's scariest number

So what was the scariest number in Aurora's Q4 results if it wasn't a CA$1.9 billion loss? It came in the company's guidance. 

Aurora projects cannabis net revenue in fiscal 2021 Q1 will be between CA$60 million and CA$64 million. The range is generally bad, but the lower figure is especially frightening. Why? Because the low end of Aurora's guidance reflects a sequential double-digit percentage of revenue decline. 

Even if Aurora hits the upper end of its projected cannabis revenue range, it will be the second quarter in a row of decreasing sales. That's problematic, to say the least, particularly because after divesting its noncore subsidiaries earlier this year, all of Aurora's revenue will stem from its cannabis sales.

What's going on? Aurora Cannabis' new CEO, Miguel Martin, acknowledged that "Aurora has slipped from its top position in Canadian consumer," a reference to the Canadian recreational marijuana market. While the company does generate revenue in the medical cannabis markets in its home country and internationally, the recreational market in Canada remains Aurora's biggest opportunity.

Aurora has slashed its expenses significantly in an effort to reduce cash burn, but it counted on rising sales along the way to move toward profitability. The company's cost-cutting can only go so far before it becomes detrimental. Aurora's best hope of achieving success is to generate growth. It's failing miserably on that goal.

Repositioning

Martin stated that his top priority now is to "reposition the Canadian consumer business immediately." He outlined several steps to accomplish this, including expanding beyond the company's value flower brands by prioritizing its premium brands. Martin also said these efforts "will be shortly followed by strategic marketing and innovation efforts in concentrates and edibles."

All of that sounds good, but repositioning Aurora could be easier said than done. In the meantime, a dark cloud continues to hover over this marijuana stock. Investors hoping for a light at the end of the tunnel for Aurora didn't see much of a flicker in the company's latest quarterly update.