Los Angeles Business Journal

Online Postage Company Finds Way on Wall Street

INTERNET: Stamps.com’s stock surges after beating earnings expectations. By Jacquelyn Ryan Monday, April 29, 2013

Investors liked what Stamps.com Inc. delivered last week.

The El Segundo online postage company’s stock soared 27 percent April 25 after the company reported earnings that beat Wall Street analysts’ expectations and executives raised guidance for the year.

While the company announced first quarter net income of $7.9 million (49 cents a share) – nearly 52 percent lower than the year-earlier quarter – the per-share earnings still beat the consensus estimate by 10 cents.

Revenue in the first quarter, ended March 31, improved 13 percent to $32.1 million, and executives increased the revenue and earnings outlook for the current year.

The news sent stock up to $32.62 on a trading volume five times higher than average Thursday.

“It’s definitely significant,” said Kevin Liu, senior analyst who follows Stamps.com for B. Riley & Co. LLC in West Los Angeles. “But the stock took a big hit after last quarter, which we thought was undeserved, so it’s making up for that ... and adding some incremental value.”

Indeed, after announcing mixed fourth quarter earnings, Stamps.com’s stock took a nearly 15 percent nose dive to $23.82 on Feb. 14.

Stamps.com allows users, ranging from individuals to large companies, to print U.S. Postal Service-approved electronic stamps and postage labels. It has been making inroads with larger e-commerce and distribution companies, whose higher volume of shipping has assisted in boosting Stamps.com revenue.

In fact, much of the first quarter’s gains are attributable to record revenue of $30.3 million in its core PC Postage division, which was up 16 percent year over year, according to Chief Executive Ken McBride.

The company is continuing to grow its customer base, adding a record 92,000 small-business customers, up 7 percent from the year-earlier quarter.

“We are very pleased that the business continues upon strong growth trends, particularly in light of that all indicators point to continued recessionary environment in the small-business area,” McBride said during a conference call after markets closed April 24.