Arcadia Biosciences (RKDA) Misses Q3 EPS by $1.27

Arcadia Biosciences (NASDAQ: RKDA) reported Q3 EPS of ($2.04), $1.27 worse than the analyst estimate of ($0.77). Revenue for the quarter came in at $392 thousand versus the consensus estimate of $290 thousand.

"We achieved important progress during the third quarter in both product commercialization and continuing research and development in each of our three strategic crop categories – hemp, wheat and soy," said Matthew Plavan, president and CEO. "We continue to lay the foundations for rapid revenue growth, across multiple product lines in 2020 and beyond, with notable acceleration of our hemp genetic innovations to enhance the enterprise value of our growing germplasm estate."

Last week, the United States Department of Agriculture (USDA) issued their interim final rule for hemp production. This long-awaited guidance further codifies the contents of the 2018 Farm Bill and is the next step forward for the expansion of legal hemp cultivation in the United States.

With this new ruling, states must mandate procedures for testing hemp crops for tetrahydrocannabinol (THC), the psychoactive compound, and disposing of "hot" crops that exceed 0.3% THC.

"Now that the THC content of U.S. hemp crops will be closely monitored by the USDA, the hemp research we have underway in Hawaii and California is more valuable than ever," said Plavan. "We are bringing modern breeding science and genomics technology to develop high-quality non-GM hemp varieties with improved uniformity, stability, resiliency and yield, enabling farmers to maximize the value and profitability of this newly-legal crop."

Plavan continued, "As an agricultural technology company accustomed to working within USDA and the U.S. Food and Drug Administration (FDA) regulated sectors, we welcome these rules, which enable us to move forward with our plans for both cannabidiol (CBD) production and hemp germplasm improvement."

Earlier this year, Arcadia gave guidance for significant revenue generation over the next two years, projected to exceed $10 million in 2020 and $30 million in 2021. Based upon this revenue growth, the company expects to generate net cash from operating activity by mid to late 2021, with sustained profitability thereafter.

"We are working hard every day to bring consumers new and improved healthy food options, while maintaining a single-minded focus: profitable growth," said Plavan.

For earnings history and earnings-related data on Arcadia Biosciences (RKDA) click here.

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