What happened

Shares of business solutions and postal services provider Pitney Bowes (NYSE:PBI) leapt 10.8% higher in the month of May.

So what

Pitney Bowes started the month out right with a strong earnings report on May 2 -- relative to expectations, at least. Sales declined 0.9% in the quarter, beating expectations by 2%. Pro forma profits came in at $0.36 per share, $0.02 higher than Wall Street had predicted. Additionally, Pitney Bowes guided investors to expect revenue that will continue to be flat to slightly down over the course of this year, with pro forma profits of about $1.77 per share, which was also slightly better than what analysts had been expecting.

SendPro ad

Not all of Pitney Bowes' SendPro prices are as low as they might sound. Image source: Pitney Bowes.

Now what

Pitney kept the momentum going when, one week later, the company announced an ambitious plan to take on rival Stamps.com (NASDAQ:STMP) with a big marketing push for its SendPro online shipping service. Advertising its service as a direct competitor to Stamps.com, Pitney portrayed its offering as offering "3x the benefits" of Stamps.com (including such benefits as 10 pounds free shipping and a three-month free trial period three times longer than what Stamps.com offers) at a post-free-trial cost of $5 per month that's "1/3" the $15.99 monthly price of Stamps.com.

What Pitney didn't emphasize is that its offer is available for a "limited time," and that once the promotion ends, its pricing on SendPro will presumably revert to its previous pricing plan -- charging individuals only $0.99 less than Stamps.com charges, and charging an "office" customer $10 more.

Whether Pitney Bowes stock can repeat its May performance in future months and quarters may depend on how much consumer uptake the company enjoys from its promotion, how long they stick around after the promotion ends -- and how much offering all these discounts cost Pitney Bowes in lost profit.

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