What happened

Shares of CalAmp (NASDAQ:CAMP) jumped 20% in September, according to data from S&P Global Market Intelligence, rallying in anticipation of the machine-to-machine communications company's fiscal second-quarter report.

To be sure, the bulk of CalAmp's gains came in the first half of last month, partly fueled by a broader rally that included a nearly 3% gain by the tech-heavy Nasdaq index. It likely helped that shares of CalAmp entered September having plunged nearly 30% year to date. They had been hurt as Wall Street lamented headwinds caused by tariffs and resulting supply-chain transition challenges for the company amid the ongoing U.S.-China trade war.

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So what

When CalAmp finally did release its quarterly results last week, however, they were technically better than expected; revenue fell a modest 2.9% year over year to $93.2 million, translating to adjusted earnings of $4.8 million, or $0.14 per share. Both the top and bottom lines arrived near the high ends of CalAmp's own guidance provided in May.

CEO Michael Burdiek lauded the company's progress transforming "to a global [software-as-a-service] solutions provider," noting that a 65% increase in software and subscription services revenue nearly offset expected weakness from the core telematics systems segment.

Now what

Still, the stock has pulled back modestly on the heels of that report, driven by a combination of its steep rise and what the market viewed as underwhelming forward earnings guidance.

During the subsequent conference call, CalAmp management once again blamed its ongoing supply chain initiatives and tariff-mitigation efforts for that guidance. But this time, it also suggested that not only will the software and subscription business sustain its momentum in the coming quarters, but that the telematics segment is also poised for stronger results as some larger customers transition from 3G to 4G LTE technology.

When all is said and done, then, this confluence of events should leave CalAmp effectively positioned for stronger profits and a potential return to top-line growth exiting 2019. If that happens, last month's gains could be just the start of a longer trend.