What happened

Shares of Canadian marijuana company Aurora Cannabis (ACB -5.30%) are down sharply in afternoon trading Wednesday, falling 7.6% through 1:55 p.m. ET after underperforming expectations in its fiscal third-quarter 2023 earnings report this morning.

Aurora reported revenue of only 64 million Canadian dollars ($48.1 million), a miss on sales. Analysts had forecast it would lose $0.05 per share on sales of $48.6 million.   

The company did not give a per-share figure for its net loss, but Aurora's total net loss of CAD$87 million appears to work out to a loss of CAD$0.25 per share ($0.19) based on the company's share count of 351.6 million.  

So what

Aurora said that its ongoing business transformation has delivered about $400 million in annualized cost savings, and that sales grew 27% year over year. Management also said it achieved its second sequential quarter of positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) -- about CAD$310,000 in total. But that's not calculated according to generally accepted accounting principles (GAAP).

The company's take all sounds pretty positive, but judging from investors' reaction to the news, it appears they're less than wholly convinced by Aurora's spin.

Now what

Nor do they appear to be entirely optimistic about the company's future.

Management says it intends to continue cutting costs, and is on track to achieve positive free cash flow by the end of fiscal 2024 (which has already begun, with fiscal 2023 having been condensed down to just three quarters, of which the third quarter was the last).

Nearer term, management says revenue in the first quarter of fiscal 2024 will be basically flat sequentially. With profit margins also expected to be roughly similar, Aurora Cannabis is unlikely to earn any profit this quarter, either.

That's apparently not what investors were hoping to hear, and this is why they're selling off the stock today.