Shares of Tilray (NASDAQ:TLRY) fell in after-hours trading after the company reported earnings for its third quarter of Fiscal Year 2023. Earnings per share came in at -$0.04, which beat analysts’ consensus estimate of -$0.05 per share. Sales decreased by 4.1% year-over-year, with revenue hitting $145.59 million. This missed analysts’ expectations of $150.13 million.
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As disappointing as Tilray’s earnings report was, Tilray did something to hit Hexo Corp. (NASDAQ:HEXO) even harder. Hexo plummeted over 22% in after-hours trading after Tilray confirmed it would acquire Hexo, and at a bargain price. The all-stock deal requires Tilray to offer up 0.4352 shares of Tilray for every one share of Hexo Corp. That suggests a purchase price of around $1.25 per share, around 24% less than Hexo closing price on Monday.
Tilray did make some gains, even amid its losses. Distribution revenue was up 5% against the same time last year, reaching $65.4 million. Using constant currency, however, revenue was actually up 12%, reaching $70.1 million. Tilray’s cannabis profits reached $22.2 million gross, up from $18 million in a quarter-over-quarter comparison. Adjusted gross margin percentage shot up, going from 33% to 47%. Tilray even managed to post $22 million in run-rate savings, working to keep up with a $30 million cost optimization plan.
The sentiment among TipRanks investors is currently negative. Out of the 631,419 portfolios tracked by TipRanks, 0.8% hold TLRY stock. Nonetheless, the average portfolio weighting allocated towards TLRY among those who do have a position is 4.91%. This suggests that investors are fairly confident about the future.