What happened

Shares of online postage provider Stamps.com (NASDAQ:STMP) popped this morning in response to an estimates-thumping earnings report last night. Instead of the mere $1.26 per share that analysts thought Stamps.com would earn on sales of $153.3 million, Stamps did $206.7 million in business ... and earned $3.11!  

Yes, you read that right. Stamps.com earned more than twice what Wall Street expected it to. The fact that the stock is now up 20.3% (as of 11:40 a.m. EDT) seems only right.

Stock up with a glowing green arrow climbing on a stock screen

Image source: Getty Images.

So what

Now admittedly, Stamps.com's profit as calculated according to generally accepted accounting principles (GAAP) wasn't quite as good as the pro forma profit stated above. Still, Stamps earned a very respectable $2.73 per share when calculated under GAAP. That was 248% better than what the company reported a year ago -- impressive when you consider that quarterly sales surged "only" 49% year over year.  

Now what

Stamps.com is benefiting from its role facilitating e-commerce businesses that have "provided an important lifeline to many businesses and individuals in the context of the COVID-19 pandemic," observed CEO Ken McBride. And with COVID-19 still raging across the country, this is a trend that's unlikely to change in the near term.

Looking ahead to year-end, Stamps is therefore raising its revenue guidance for the full year to a range of $650 million to $725 million, and roughly doubling its guidance for net income to anywhere from $3.93 to $6.70 per diluted share. Pro forma profits will look even better, growing to "approximately $6.25 to $9.25."

At the midpoint, that's a cool $7.75 per share in profit Stamps.com is predicting, versus Wall Street's $5.10 per share forecast. No wonder investors are pleased.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.