CalAmp shares jumped 25% this morning: here’s the catalyst

Shares of CalAmp Corp (NASDAQ: CAMP) are down more than 25% on Wednesday after the IoT company reported weaker-than-expected financial results for its third quarter and refrained from giving future guidance.

Third-quarter financial performance

CalAmp said it lost $11.4 million in Q3 that translates to 33 cents of per-share loss. On an adjusted basis, its quarterly loss came in at 8 cents per share. At $68.8 million, the California-based company noted a 12% annualised decline in its revenue.

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In comparison, analysts had called for 8 cents of EPS on $79.18 million in revenue. According to CalAmp, revenue from software and subscription services was up 7.0% on a year-over-year basis but down 14% in telematics products. The former made up 53% of its total quarterly revenue.

Gross margin jumped to 41% in Q3. CalAmp had 1 million core S&SS subscribers at the end of the quarter and $91 million in cash and equivalents. The $268 million company now has its stock down more than 20% year-to-date.

CalAmp is struggling with supply constraints

CalAmp did not offer guidance for the future, citing uncertainties related to the ongoing supply chain issues that also weighed on its shipments in Q3. In the earnings press release, CEO Jeff Gardner said:

The ongoing shortages have been more pronounced than expected. Despite this challenging situation, we are encouraged with the strong customer demand as evidenced by the consistent high level of customer backlog over the past few quarters as we continue our transformation to a SaaS enterprise.

The upcoming Chinese New Year also hurts visibility into product shipments for the current quarter, the company added.