Why CalAmp Jumped 17% in April

By Markets Fool.com

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What: Shares of wireless communications and Internet of Things company CalAmp jumped 17%, according to S&P Capital IQ data, as investors reacted favorably to the company's beating analyst estimates for earnings and revenue in its fourth-fiscal-quarter earnings report.

So what: As the chart shows, the full gain of CalAmp's April was due to CalAmp's earnings. And the company did not disappoint. CalAmp reported fourth-quarter revenue up 16% year over year, to $69.2 million, ahead of analysts' estimates for $68 million as the company's top-line result was driven by its core Wireless DataCom division that grew 23% during that timeframe. On a GAAP basis, the company grew its EPS figure 125% year over year to $0.18.

As far as guidance goes, the company expects its upcoming first quarter's revenue to be lower than last quarter's haul, with a range of $63 million to $67 million, but that's mostly due to a large shipment to Caterpillar that occurred during the recently reported fourth quarter. On a year-over-year basis, however, the midpoint of CalAmp's next-quarter guidance would increase 10.2% from last year's corresponding quarter.

Now what: For investors, perhaps the most intriguing announcement occurred before CalAmp's well-received earnings report -- that CalAmp will purchase privately held Crashboxx for $1.5 million in cash and future earn-out payments. Crashboxx further bolster's CalAmp's usage-based insurance business line that could grow to be a strong supporting business to CalAmp's Wireless DataCom business.

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Crashboxx specializes in driver-behavior, crash-detections, and damage estimation technologies and fits in line with CalAmp's broader strategy of IoT- and machine-to-machine-based communication with a focus on transportation. The deal signifies that CalAmp is serious about growing its usage-based insurance business. If the company is able to do so, investors could be further rewarded.

The article Why CalAmp Jumped 17% in April originally appeared on Fool.com.

Jamal Carnette owns shares of Apple. The Motley Fool recommends Apple and CalAmp. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.