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Why Pitney Bowes Stock Just Popped 17%

By Rich Smith – Updated Apr 15, 2019 at 3:47PM

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Pitney Bowes just got some really good news from

What happened

Sometimes, it's better to be lucky than to be good.

Last year, seeking to stem a revenue decline, Pitney Bowes (PBI) launched a full-frontal attack on's (STMP) print-postage-on-your-PC business, positioning its SendPro online shipping service as a cheaper service with "3x the benefits" was offering. The new marketing push doesn't seem to have helped it out-compete, though -- Pitney Bowes's revenue was down 10% in its last quarter, and its profit dropped by 50%.

But then, a miracle happened. Last night, in the course of reporting its Q4 earnings, announced that it is terminating its "revenue share partnership" with the U.S. Postal Service.

Check out the latest and Pitney Bowes earnings call transcripts.

A postcard with red and green decoration that says "Merry Christmas and Happy New Year"

Pitney Bowes just got some really good news from Image source: Getty Images.

So what is shifting its focus toward selling postage for non-USPS shippers such as FedExUPS, and Amazon here in the U.S., and toward still other shippers abroad. In so doing, it appears likely to leave a lot of USPS money on the table -- money that Pitney Bowes should now be free to pick up.

Now what

It remains to be seen whether Pitney Bowes will wholly succeed in moving in on turf that has voluntarily vacated, but I'd have to say its chances look good. Recently jilted, the USPS can't be too happy with right about now, and it should be very amenable to giving Pitney Bowes good terms on any agreements it might seek in order to pick up the slack.

With Pitney Bowes' stock trading for a bargain-basement 7 times earnings, shareholders' losses today look like Pitney Bowes investors' gain.

Rich Smith owns shares of The Motley Fool owns shares of and recommends The Motley Fool has a disclosure policy.

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