Stamps.com Shares Collapse After 2019 Profit Outlook Is Slashed

Stamps.com Inc. plunged more than 45% post-market Thursday after the company slashed its profit outlook for the full year, fueling investor concerns about its ability to protect margins in the absence of a key partnership with the U.S. Postal Service.

The company, which makes software that lets customers print postage for U.S. mail, had set its earnings forecast for the year in February, when it reported fourth-quarter results and also said it had ended the USPS partnership. While it expected the discontinuation to result in some “short term pain,” the latest outlook suggested that pain may be more severe than anticipated.

Stamps said the lowered guidance mainly reflected potential unfavorable short- and long term amendments, re-negotiations and termination of certain contracts between the USPS and the company’s partners who are part of the USPS’s reseller program. The company said it expected a profit of $3.35 to $4.85 a share for the full year, down from its prior view of $5.15 to $6.15 per share.

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