(STMP) Stock Dives after Ending Exclusive Partnership with USPS

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The stock price of (NASDAQ:STMP) declined significantly after announcing that it is ending its exclusive partnership with the United States Postal Service (USPS).

STMP shares were trading around $85.42 a piece, down by 56.78 percent around 11:58 a.m. EST on Friday.

During the company’s earnings conference call, CEO Ken McBride said, “One of our nonnegotiable items is that … We will no longer be exclusive to the USPS.

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USPS rejected “these terms of any other terms of our partnership proposal…Our customers can no longer survive on just the USPS, and we don’t see that as a viable option for the next five years. So basically that was our premise…no matter what, this company can no longer be exclusive given the trends in the shipping market,” he added.

Furthermore, McBride said the company’s decision on the issue is final unless USPS agrees to remove “exclusivity” in the partnership agreement. He explained that needs to “embrace other carriers” and it cannot afford to just remain an exclusive partner with USPS because it’s not the best interest of its customers.”

“If our customers can’t receive the best solution, don’t get the best offer in the market, then they will leave us and in the end, we will lose no matter what,” he said.

Fourth quarter financial results

On Thursday, released its financial performance for the fourth quarter of 2018. The company said its revenue increased by 29 percent to $170.2 million from $132.5 million in the same period in 2017.

Its GAAP net income rose 6 percent to $42.7 million from $40.2 million in the same period a year ago. Its GAAP net income per fully diluted share was $2.30, an increase of 7 percent in the same period in 2017.

McBride said, “We are pleased with our fourth quarter and fiscal 2018 financial performance. 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,” said McBride

He added, “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.”