Shares of Stamps.com (NASDAQ:STMP) were down 55.1% as of 11:30 p.m. EDT Thursday after the online mailing and shipping services company announced first-quarter 2019 results and lowered its full-year outlook.
On the former, Stamps.com's quarterly revenue climbed 2% year over year to $136 million, translating to a 51% decline in adjusted (non-GAAP) earnings per share to $1.23. The company didn't provide specific first-quarter guidance with its Q4 report in February -- when it shocked the market by terminating its exclusive relationship with the U.S. Postal Service -- but CEO Ken McBride insisted the quarter was "in line with our expectations in light of our new strategic direction."
Though we don't normally pay close attention to Wall Street's demands, most analysts were modeling even lower adjusted earnings of $1.07 per share on a 5.6% revenue decline. That said, Stamps.com's per-share earnings were bolstered in part by the company's decision to repurchase roughly 235,000 shares during the quarter for $32 million -- a move management is likely regretting considering today's massive decline.
"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," McBride added.
Looking to the full year of 2019, however, Stamps.com significantly reduced its guidance to call for revenue of $510 million to $560 million (down from its old range of $540 million to $570 million), and for GAAP net income per share of $1.15 to $2.56 (down from $2.86 to $3.76 previously).
Stamps.com blamed its enormous outlook reduction on potential adverse contract changes -- of which it was previously unaware -- between the USPS and certain strategic partners that are part of the Postal Service's reseller program. That's not a good look for a company that's trying to convince investors it has everything under control. And the stock is responding in kind.