What happened
Investors in mobile Internet of Things company CalAmp (CAMP 2.75%) had a terrific Friday, with their shares rising 21.9% through the closing bell in response to a tremendous earnings beat.
CalAmp actually reported its Q4 and full-year fiscal 2021 earnings Thursday evening, but Friday was the first chance investors got to trade on the information. And trade they did, and for good reason. CalAmp delivered a $0.14 per share pro forma profit for the quarter -- nearly three times the $0.05 analysts said CalAmp was "supposed" to earn.
Image source: Getty Images.
So what
Sales from continuing operations grew 6% year over year to $81.9 million (or $89.5 million including revenue from CalAmp's discontinued operations -- the divested LoJack North America), and pro forma profits doubled. Granted, the company reported a GAAP loss for the quarter ($0.09 per share). But even that was a much slimmer loss than the $1.16 per share CalAmp lost a year ago.
For the year, CalAmp's sales declined 4% (the LoJack effect, again), but on the plus side, losses were cut by more than half ($0.62 per share). Even better, CalAmp reported positive free cash flow of $21.6 million, versus last year's negative FCF.
Now what
Management said it was "maintaining its policy of not providing quarterly guidance," citing uncertainty due to COVID-19 as the reason. Analysts weren't so shy, however.
According to Wall Street, CalAmp is on track to grow earnings as much as 43% in this fiscal year 2022, to $0.43 per share, reversing 2021's negative earnings year. And all they think CalAmp needs to make that happen is 8% sales growth to $332 million.
Given that CalAmp just finished growing sales 6% in the middle of a pandemic, that doesn't seem like too much of a stretch.
