Plummets After Announcing Discontinuation Of USPS Partnership

The company also provided a weaker than expected forecast for 2019

Shares of (STMP) plunged in morning trading after the company gave a much weaker-than-expected forecast for 2019 along with an announcement that it had ended its exclusive partnership with the U.S. Postal Service.

EARNINGS AND GUIDANCE: On Thursday after the market close, reported fourth quarter adjusted earnings per share of $3.73 on revenue of $170.2M, above analysts' estimates calling for EPS of $2.90 and revenue of $160M. Adjusted EBITDA for the quarter was $71.3M, up 11% from last year. In a statement, chairman and Chief Executive Officer Ken McBride said, "We achieved strong financial results driven by exceptional execution in our shipping business and we completed our strategic acquisition of MetaPack which has positioned as the leading global e-commerce shipping software company. We are well positioned to successfully compete on a global scale with a focus on driving long-term value for our customers, partners and shareholders."

Looking ahead, issued weak guidance for fiscal 2019, calling for EPS of $5.15-$6.15, compared to the $10.79 consensus. The company also forecast FY19 adjusted EBITDA of $145M-$165M.

DISCONTINUATION OF USPS PARTNERSHIP: announced on its quarterly earnings call that it will discontinue its partnership with the U.S. Postal Service. "We will no longer be exclusive to the USPS and that's non-negotiable," CEO McBride said. He added that "The USPS has not agreed to accept these terms or any other terms of our partnership proposal. So at this point we've decided to discontinue our shipping partnership with the USPS so that we can fully embrace partnerships with other carriers who we think will be well-positioned to win in the shipping business in the next five years." McBride also noted that the short-term financial impact will experience as it forgoes its shipping revenue share with the USPS will represent some "short-term pain" over the next two years.

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