In what's hardly a regular occurrence for a marijuana stock these days, Aurora Cannabis (ACB 0.89%) was a real market beater, rising 19% over the course of this week. Somewhat better-than-expected quarterly results, combined with gains in an important product category, helped push Aurora's shares higher.
Monday night, Aurora released its fourth-quarter 2021 figures, and they sure featured a lot of red ink. Net sales declined by 20% year over year (and marginally compared to the third quarter) to just under 55 million Canadian dollars ($43 million). The adjusted loss narrowed significantly from the year-ago result of CA$33 million, but was still crimson-toned at over CA$19 million.
Worse was anticipated in terms of profitability, however, even if that sales figure didn't quite meet expectations.
Another factor investors might have liked is that Aurora seems to be successfully pivoting to focus more on sales of medical marijuana, a more profitable category than recreational, for the most part. Sales of medical cannabis rose 9% year over year to over CA$35 million for the quarter, in contrast to the queasy 45% decline in recreational.
As if to prove its recent commitment to the medical product, Aurora announced later in the week that it has launched a medical cannabis-oil product called Bidiol in Uruguay (one of the few countries in the world that has fully legalized marijuana and its derivatives). It's available in pharmacies throughout the South American nation, the company said.
Investors are expecting steeper-than-estimated losses from marijuana companies, especially if they're based in the struggling cannabis market that is Canada. I'm not sure this week's surge of optimism on Aurora is justified; after all, many other weedies are enjoying notable revenue gains, not declines. Also, the Canadian company's steep fall in recreational sales and its continued lack of profitability are very concerning.