Stamps.com (STMP) beats and raises, stock up 16% (4Q04 earnings)

Stamps.com announced that Q4 results beat consensus estimates of both EPS and revenue, and that guidance would be above current consensus. The stock rose by about 16.5% in subsequent trading. Details and quick comments:

Q4 Results
(all percentages changes and comparisons are year on year, unless stated otherwise)

• EPS was $0.06, beating consensus by $0.03, and versus net loss of ($0.12).
• Revenue of $11.7 million, up 83%, beat consensus of $10.75 million.
• Core PC business generated revs of $10.8 million, up 69%. Subscription service revs were $8.2 million, up 61%. Online store revs were $1.6 million, up 41%.
• PhotoStamps generated revs of $900,000, gross margin of $300,000.
• Gross margin was 7%, up 7% points.
• Gross margin for the core PC business was 70%.
• GAAP net income was $1.5 million versus loss of $2.7 million.
• 79,000 "Power Plan" customers added, versus 7,000.
• "Power Plan" customers were 51% of total PC customers, versus 30%.
• Acquisition cost per gross customer was $58, versus $62.

Q1 Guidance

• EPS of $0.05 versus currrent consensus of $0.02.
• Revenue of $11 million, versus current consensus of $10.17 million.
• Gross margin in low 70% range.

Full Year 2005 Guidance

• EPS of $0.26, versus consensus of $0.17. Prior guidance was $0.16.
• Revenue of $48.5 million, versus consensus of $42.9 million. Prior guidance was $43.5 million.
• Gross margin in mid-70s.

Quick comments

• Noted: " During the third quarter of 2004, Stamps.com received USPS authorization to proceed with a market test of PhotoStamps, a new form of postage that allows customers to include photographs or graphics along with valid US postage. Stamps.com concluded the market test on September 30, 2004 with 138 thousand sheets, or 2.75 million individual PhotoStamps, ordered and accepted during the 7 ½ week test. Late in the third quarter of 2004, Stamps.com submitted a formal request to the US Postal Service to continue testing the PhotoStamps service. That request is still under consideration by the US Postal Service."

STMP chart below.