Why CalAmp Stock Plunged Today
Shares of CalAmp (NASDAQ: CAMP) were down 16.2% as of 2:15 p.m. EST Tuesday after the machine-to-machine communications company reduced its fiscal third-quarter 2019 guidance.
Yesterday after the market closed, CalAmp told investors it now expects quarterly revenue in the range of $88 million to $89 million, adjusted EBITDA of $10.5 million to $11.5 million, and adjusted earnings per share of $0.23 to $0.25. By comparison, CalAmp's previous guidance (provided in late September) called for revenue of $94 million to $99 million, adjusted EBITDA of $12 million to $16 million, and adjusted net income of $0.29 to $0.35 per share.
CalAmp reminded investors that when it provided its old outlook, management detailed plans to accelerate their supply chain diversification program to shift manufacturing to providers with facilities outside of China -- a move made in response to recent trade tensions and tariff concerns between China and the United States.
"During the third quarter, CalAmp experienced various supply disruptions related to this transition, as well as extended lead times driven by component shortages," the company elaborated. "This resulted in inbound product supply delays at quarter end and impacted the company's ability to ship certain products to meet customer demand."
To be fair, CalAmp added that "management is taking steps to address these operational challenges." And investors can take solace knowing that -- with sustained demand for its products still intact -- CalAmp should emerge a stronger company better equipped to meet that demand going forward. Given its near-term challenges in the meantime, however, it's no surprise to see the stock pulling back today.
10 stocks we like better than CalAmpWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and CalAmp wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of November 14, 2018
Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends CalAmp. The Motley Fool has a disclosure policy.