Shares of CalAmp (NASDAQ:CAMP) have plunged today, down by 11% as of 1:45 p.m. EDT, after novel coronavirus fears gripped the market and a steep drop in oil prices added to the chaos. The company recently warned that it would miss its guidance due to the public health crisis.
Tech companies have been disproportionately impacted by the COVID-19 outbreak because many have supply chains and other operations concentrated in China, which is where the virus originated. Last week, CalAmp updated its outlook for its fiscal fourth quarter, warning that it would miss its original guidance due to the coronavirus.
In a statement, CEO Michael Burdiek said:
During the fourth quarter, we experienced significant supply shortages and softer than expected demand for our MRM Telematics products. The supply shortages were primarily attributable to our one remaining Chinese supplier, the production capacity of which was significantly impaired in February due to the extended Chinese New Year holiday resulting from the coronavirus outbreak. Though this sole remaining MRM Telematics supplier in China is currently ramping production, it remains unclear as to when it will return to full capacity. We also experienced other supply shortages due to supply chain transitions, coupled with extended lead times on raw materials and components sourced from China, but used elsewhere in our global supply chain.
As a result, CalAmp was unable to ship orders, resulting in an $8 million increase in its backlog. The software-as-a-service (SaaS) business remains strong and CalAmp still anticipates hitting its target of $120 million in SaaS revenue in fiscal 2020.
The company now expects revenue in the fourth quarter to be $85 million to $87 million, compared to its prior forecast of $95 million to $100 million. CalAmp did not update its outlook for the bottom line on either a GAAP or non-GAAP basis because "the information necessary to calculate those metrics is not yet available."