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Here's Why CalAmp Stock Tanked in September

By Chris Neiger – Oct 6, 2020 at 10:57AM

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CalAmp investors fled as revenue and earnings fell in the second quarter.

What happened

Shares of CalAmp (CAMP -1.12%) tumbled 12% in September, according to data provided by S&P Global Market Intelligence, after the company reported its second-quarter results toward the end of the month. 

CalAmp's steep share price drop during the month was far greater than the 4% loss the S&P 500 suffered and came in stark contrast to the broader gains many tech stocks have experienced over the past few months.

So what 

CalAmp reported revenue of $83.5 million in the second quarter, down 10.4% from the year-ago quarter. The company's earnings also fell over the same period, with the company reporting an adjusted loss per share of $0.03, compared to earnings of $0.14 per share in the second quarter of 2019. 

A red line going down on a dark background.

Image source: Getty Images.

Sales fell across all of the company's business segments, including Telematics Products, which accounted for 49% of CalAmp's total revenue. CalAmp's chief financial officer, Kurt Binder, said on the company's quarterly earnings call that part of the revenue drop in this segment was attributed to the current pandemic. 

"[T]he continuing uncertainty around the pandemic and related global economic environment has resulted in our small to medium-sized customers differing product orders as they carefully manage cash flows and assess end customer demand," he said. 

Investors were clearly disappointed with the company's quarterly results and pushed CalAmp's share price down after they were released.

Now what 

CalAmp's management isn't providing any guidance for the third quarter because of the ongoing economic effects of COVID-19. But Binder did say "we are proceeding into the third quarter with solid demand in our SaaS business" and he expects another solid quarter from its biggest customer, Caterpillar. Binder thinks CalAmp's software-as-a-service (SaaS) businesses and sales from its work for Caterpillar could help offset the "ongoing weakness" the pandemic is bringing to CalAmp's mobile resource management telematics products. 

Investors appear slightly more positive about CalAmp's stock right now and have pushed shares up 4% since the beginning of this month. 

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

CalAmp Stock Quote
$3.54 (-1.12%) $0.04
Caterpillar Stock Quote
$235.38 (-0.13%) $0.31

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