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Stamps.com’s Shares Lower Following Reductions in Full Year Sales, Earnings Estimates

7:10 AM, May 9, 2019 — Shares of Stamps.com (STMP) plunged in early trade on Thursday after the company lowered its full year guidance amid an evolution of its corporate strategy and as investors side-stepped better-than-expected results in the first quarter.

Stamps.com’s sales of $136.0 million during the three months ended March 31 were higher than $133.6 million a year ago and also above the $126.1 million average analyst estimate compiled by Capital IQ. The increase was due in part to a 30% surge in turnover at the customized postage segment.

While adjusted earnings fell to $1.23 a share from $2.54 a share a year earlier, it still managed to beat the $1.07 per share market consensus.

“During the first quarter we continued to make progress on our efforts to evolve our strategy to more fully embrace a global multi-carrier business model,” Chief Executive Officer Ken McBride said in the statement. “Our financial results for the first quarter were in-line with our expectations, in light of our new strategic direction.”

Looking ahead, Stamps.com now sees full year 2019 revenue in a range of about $510 million to $560 million, below its previous forecast of $540 million to $570 million but in line with the $555 million Street’s view. In line with the cut in sales outlook, the company is also projecting adjusted earnings per share of $3.35 to $4.85, notably lagging both a prior estimate for $5.15 to $6.15 and market consensus of $5.43 per share.

The company said its first-quarter effective rate of 30.0% shouldn’t be assumed to apply for 2019 as a whole, and the after-tax income during the remainder of 2019 would likely reflect a materially higher rate than was reflected in after-tax results for the first quarter.

Shares of the company nosedived by more than 47.5% in early trade on Thursday.

Companies: Stamps.com Inc.
Price: 43.50 Price Change: -39.89 Percent Change: -47.84

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