Stamps.com Plunges 50% as It Ends Crucial Partnership With Post Office
(Bloomberg) -- Stamps.com Inc. forecast full-year profit that was nearly half of the average of analysts’ estimates, as it ended a crucial partnership with the U.S. Postal Service. Shares plunged over 50 percent in post-market trade.
The company, which makes a software that allows customers to print postage for U.S. mail, said during its conference call that it would discontinue its exclusive shipping partnership with USPS. Under the partnership, Stamps.com subscribers were able to buy USPS postage at a discounted rate.
The company said the discontinuation will results in some "short term pain, and now expects 2019 adjusted profit to be in the range of $5.15 to $6.15 per share, while analysts had estimated earnings of $10.79 per share for the year. Revenue forecast also disappointed, with Stamps expecting a range of about $540 million to $570 million, compared to analysts’ estimate of $689 million, according to data compiled by Bloomberg.
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