Stamps.com Inc. (NASDAQ: STMP) shares were absolutely destroyed after the firm reported its most recent quarterly results after the markets closed on Thursday. However, it wasn’t so much the earnings results that dragged shares down but the fact that the firm is ending its partnership with the U.S. Postal Service.
The firm said that it had $3.73 in earnings per share (EPS) and $170.2 million in revenue, which compares with consensus estimates of $2.90 in EPS and $159.99 million in revenue.
Looking ahead to the 2019 full year, the company expects to see EPS in the range of $5.15 to $6.15 and revenue between $540 million and $570 million. Consensus estimates call for $10.79 in EPS and $685.4 million in revenue for the year.
As for the poor guidance, Chair and CEO Kenneth Thomas McBride detailed on the conference call:
We will no longer be exclusive to the USPS and that’s non-negotiable. The USPS has not agreed to accept these terms or any other terms of our partnership proposal. So at this point we’ve decided to discontinue our shipping partnership with the USPS so that we can fully embrace partnerships with other carriers who we think will be well-positioned to win in the shipping business in the next five years.
Shares of Stamps.com were last seen down 57% at $84.55, in a 52-week range of $83.84 to $285.75. The consensus price target was $285.00.