Canaan’s revenue plunges on continued bitcoin weakness

Cryptocurrency miner and mining machine maker Canaan Inc. (CAN.US) on Tuesday reported its revenue fell sharply in the third quarter year-over-year on continued weakness in bitcoin prices, but it swung back to profitability on recent gains for the cryptocurrency.

The company said its revenue plunged to just $14.5 million in the third quarter, down 90% from $150.5 million a year earlier. Revenue from mining machine sales fell to just $4.8 million from $118.6 million a year ago as low bitcoin prices depressed demand. Its bitcoin mining revenue fell to $9.5 million in the latest three-month period from $30.6 million a year earlier.

The company recorded a $42.9 million loss from operations in the latest quarter, widening from a $23.9 million loss a year earlier. But it also recorded $52 million in gains related to changes in the fair value of its cryptocurrency and financial derivative holdings, which it attributed to gains in bitcoin prices between June and September this year.

Those gains lifted the company to a third-quarter net profit of $8 million, reversing a loss of $27.7 million in the year-ago period.

Canaan’s shares fell 19.2% in Tuesday trading in New York after the report’s release. The stock has lost more than three-quarters of its value this year.

By Doug Young

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