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by Stockwatch Business Reporter
The S&P/TSX Cannabis Index lost 2.40 to 151.39, while the CSE Composite Index lost 6.41 to 563.15. Charlie Bachtell's U.S. MSO (multistate operator) Cresco Labs Inc. (CL) added 26 cents to $11.86 on 2.34 million shares, after making an unexpected but welcome entry into the exclusive world of profitability. It posted net earnings of $4.9-million (U.S.) or one U.S. cent a share in the third quarter, considerably better than analysts' predictions of a loss of seven U.S. cents a share.
The surprise profit came in part from sharply higher revenue. Cresco touted record revenue of $153.3-million (U.S.) in the third quarter, well above the second quarter level of $94.3-million (U.S.), and surpassing analysts' third quarter predictions of just $116-million (U.S.). Analysts were also predicting adjusted EBITDA of $19-million (U.S.). The actual figure was more than double that, at $46.4-million (U.S.). Analysts seemed jubilant to be proved wrong. "To say Cresco 'beat' earnings would be an understatement," wrote Needham & Co., marvelling at what it called an "earnings pounding." Stifel, praising Cresco for showing "the best Q3/20 growth metrics among peers," opined that the results are "justifying the company's strategic business model focused on the wholesale market."
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