Arcadia Biosciences’ (NASDAQ: RKDA) loss expanded, while revenue dropped in the fourth quarter of 2019. The agricultural food ingredient company posted a loss of $6.2 million in Q4 2019 compared to a loss of $646,000 in the prior-year quarter. On a per share basis, the loss for the recently ended quarter stood at 72 cents.
Revenue decreased by 6% to $416 million, hurt by the decrease in government grant and contract research revenue. RKDA shares, which ended up 14.53% at $3.31 today, plunged more than 10% in the after-hours.
The Davis, California-based firm projected to exceed $10 million of revenues in 2020. However, the company added that it will continue to assess the potential impact of coronavirus outbreak on its business. Arcadia expects to recognize revenues from more than $3.7 million in backlog GoodHemp seed orders between the second and fourth quarter this year.
Last December, the company launched GoodHemp, its new commercial brand for delivering hemp seeds, transplants, flower and extracts. GoodHemp product line was made by Arcadia’s proprietary technology platform ArchiTech. In December, Arcadia also introduced GoodWheat, wheat flour with reduced gluten. The full-scale release is planned for spring 2020.
Even though agriculture is deemed as an essential industry, the farmers and supply chain are expected to be affected by the current quarantine conditions due to the coronavirus outbreak. Arcadia stated in the Q4 earnings call that the company will evaluate and update the outlook if market conditions worsen and if it takes a longer time to recover from the adverse effects of the global pandemic.
When an analyst questioned how the social distancing and economic downturn has impacted the wheat consumption in the US, the management replied that the milling capacity in the US has increased in the last 10 days and the grain industry is experiencing a week-on-week volume hike of about 180%. The management added that the wheat industry is operating at full capacity and meeting the demand as of now.
Shares of Arcadia had dropped 40% since the beginning of this year.