Stamps.com (Nasdaq: STMP) was hovering around 3 17/32 early Thursday despite reporting a narrower-than-expected loss for the third quarter. The company said it expects to see a charge for recently announced cost cuts in the fourth quarter.
The Santa Monica, California-based online postage company said it lost $38.5 million, or 80 cents per share, before charges. Analysts had expected an 85 cent loss.
Stamps.com said it expects the recent cost-cutting measures, including a 40 percent reduction in staff, to save about $30 million per year, and to reduce quarterly cash burn.
The company said it will slash its current expectations for sales and marketing spending by “half or more” in 2001.
In addition, postage costs for small businesses will be going up as the company cuts marketing spending for its small-business unit. Small business accounted for 88 percent of total revenue in the third quarter, the company said.
Beginning this month, new small-business customers signing up for the company’s “Simple Plan” will be charged a minimum of $4.50 per month, $2.51 higher than in the past. Companies on the “Power Plan,” which provides unlimited service, will continue to pay a flat rate of $15.99 per month.
“We have taken aggressive steps to reduce expenses and focus on building a profitable business,” said Bruce Coleman, who on Tuesday was named interim chief executive officer. The company’s former CEO, John Payne, resigned October 12th.
The company said it plans to focus marketing efforts on its enterprise business unit, which accounts for a much smaller percentage of revenue than the small-business division. The unit “has the potential for greatest growth,” said Coleman. “This very focused approach will enable the company to build its customer base, albeit at a slightly slower pace,” he said.
Stamps.com shares have fallen from a 52-week high of 98 1/2. In addition to its CEO, the company lost its chief financial officer and controller last month.
While searching for replacements, the company said it will also consider “strategic alternatives.”