Even as Markets Rise, These 2 Stocks Reveal Investor Uncertainty

Tuesday brought a relief rally to Wall Street, with gains in the Dow Jones Industrial Average (^DJI 0.56%), S&P 500 (^GSPC -0.88%), and Nasdaq Composite (^IXIC -2.05%) more than offsetting all their respective losses on Monday. Investors seemed to take comfort that President Biden chose to offer details on plans to fight back against the latest in the COVID-19 pandemic, most notably his commitment to favor testing and vaccination over lockdown measures.

Data source: Yahoo! Finance.

Yet a couple of companies that reported their latest financial results after the closing bell saw their stocks fall in after-hours trading. Below, you'll learn more about how CalAmp (CAMP 2.75%) and AAR (AIR 1.73%) have seen their results affected by the pandemic and related economic pressures, as well as why investors might have some concerns about their ability to recover fully from recent challenges.

CalAmp deals with supply chain challenges

Shares of CalAmp were lower by nearly 12% in after-hours trading Tuesday. The connected-intelligence specialist experienced a setback in some key metrics, and it cited certain aspects of the current environment in keeping it from taking greater advantage of strong customer demand and high backlogs.

CalAmp's numbers reflected the difficulties the company has had. Revenue was down 12% year over year, with its key software and subscription services segment seeing sales growth of just 7%. Supply chain shortages were particularly noteworthy in CalAmp's telematics products segment, where revenue dropped 14%. As a result, the company posted an adjusted loss of $0.08 per share, reversing a year-ago profit of $0.10 per share.

Component shortages caused a big reduction in shipments during the quarter, according to CEO Jeff Gardner. Despite efforts to work with suppliers to get necessary parts, CalAmp has found it necessary to look at redesigning certain devices and take other extraordinary measures to meet demand.

In the long run, CalAmp is hoping to make a transition toward a fully subscription-based business model. However, the company's continued policy of not offering quarterly guidance shows just how much uncertainty there is about the immediate future for CalAmp.

Image source: Getty Images.

AAR faces headwinds

Elsewhere, shares of AAR were down 6% late Friday afternoon. The aftermarket aerospace parts and services specialist saw some encouraging signs in its fiscal second-quarter results, but investors still seemed nervous about the longer-term trajectory for the industry.

AAR's numbers showed mixed performance. Overall revenue rose 8% year over year, with a 33% rise in sales to commercial customers offsetting a 15% drop in government sales. Although AAR saw a recovery in the commercial market due to reduced travel restrictions from the COVID-19 pandemic, it wasn't able to replace significant revenue from heightened program activity in modifying and selling two C-40 aircraft to the U.S. Marine Corps this time last year. Even with those challenges, though, adjusted earnings jumped 71% to $0.53 per share.

Still, AAR is optimistic overall. CEO John Holmes pointed to adjusted operating margin levels that now exceed pre-pandemic numbers, and he noted some renewals of key contracts helping its future prospects. Meanwhile, on the government side, a new contract to work on F-16 aircraft for the Air Force should help support the other half of its business.

Investors have hoped that AAR would bounce back more strongly as the pandemic progressed, but new worries about the omicron variant could delay a full recovery. Until things get clearer, AAR could remain under pressure.