The U.S.-listed shares of OrganiGram Holdings Inc. OGI, +8.72% OGI, -0.44% rose 0.7% in premarket trading Tuesday, after the Canada-based cannabis company reported a narrower fiscal second-quarter loss and revenue that more than doubled to beat expectations and as gross margin swung to positive.
The net loss for the quarter to Feb. 28 was C$4.05 million ($3.20 million), after a loss of C$66.39 million in the year-ago period. The company did not provide per-share data. Net revenue grew 117.4% to C$31.84 million ($25.16 million), above the FactSet consensus of C$31.67 million, as an increase in adult-use recreational and international revenue offset lower average net selling prices. Cost of sales fell 19.9% to C$24.96 million, amid lower production costs, the elimination of unabsorbed overheads and “significantly” reduced inventory. Gross margin swung to positive C$9.07 million from negative C$17.20 million. For the fiscal third quarter, the company expects revenue to be higher than the second quarter, while the FactSet consensus is C$35.30 million. The stock has dropped 14.9% year to date through Monday, while the AdvisorShares Pure US Cannabis ETF MSOS, has dropped 25.2% and the S&P 500 SPX, +0.87% has slipped 7.4%.