Canadian cannabis company Cronos tops earnings estimates, stock jumps 6% premarket

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Cronos Group Inc. shares [ rose 6% in premarket trade Thursday, after the Canadian cannabis company posted better-than-expected earnings for the third quarter and named a new CEO. Cronos said it had a net income of $68.464 million, or 19 cents a share, in the quarter, down from $604.128 million, or $1.62 a share, in the year-earlier period. Revenue net of excise taxes came to $11.4 million, up from $5.8 million a year ago. The FactSet consensus was for a loss of 6 cents a share and revenue of $11.1 million. Earnings in the year-earlier period were buoyed by a $632.5 million gain on a revaluation of derivative liabilities. That number came to $105.3 million in the 2020 third quarter. The company named Kurt Schmidt as its new president and CEO, replacing Mike Gorenstein who has been appointed executive chairman. Schmidt is a former CEO of Blue Buffalo Co. Ltd. and has done stints at Nestle and Kraft Foods. “During the third quarter of 2020, because of the effects from COVID-19 in the U.S. a significant number of the Company’s retail customers continued to be challenged by permanent and temporary store closings,” the company said. Shares have fallen 28% in the year to date, while the Cannabis ETF has fallen 27% and the S&P 500 has gained 6.6%.
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