Stamps.com news concerning its relationship with the United States Postal Service (USPS) has STMP stock down on Friday.
Stamps.com (NASDAQ:STMP) says that it will no longer be continuing its exclusive deal with the USPS. Instead, the company says that it will be expanding its business to work with other shippers, such as UPS (NYSE:UPS) and FedEx (NYSE:FDX).
“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,” Kenneth Mcbride, Chairman and CEO of Stamps.com, said in a statement obtained by CNBC.
What may be most damaging about this Stamps.com news is what it does to the company’s outlook for 2019. Stamps.com says that it is only expecting earnings per share between $5.15 to $6.15. for the year.
That may not seem bad at first, but putting it in perspective really shows why STMP stock is falling so hard today. The company’s earnings per share for the full year of 2018 came in at $11.78. This change will also have it easily missing Wall Street’s earnings per share estimate of $10.79 for the full year of 2019.
The Stamps.com news also includes its revenue guidance for 2019. The company is expecting revenue for the year to come in between $540 million and $570 million. This is also a blow to STMP stock by being well below analysts’ revenue estimate of $685.40. million for the full year of 2019.
STMP stock was down 56% as of noon Friday.
As of this writing, William White did not hold a position in any of the aforementioned securities.