Stamps.com stock dropped 47% in premarket trading after the company slashed its 2019 earnings forecast, as well as projected further declines in 2020 and 2021.

The postage company announced on its first quarter conference call that it expects to take a hit due to uncertain contract changes that its partner companies have with the United States Postal Service. The hit comes after Stamps.com said in the previous quarter that it will no longer partner with USPS.

Shares of Stamps.com had already fallen 46.4% this year as of Wednesday’s close of $83.39 a share. The stock’s market value was $1.45 billion on Wednesday.

“We have very recently become aware that the USPS is currently renegotiating the negotiated service agreements of several of our reseller partners,” Stamps.com CFO Jeff Carberry told shareholders on the call. “While these are ongoing negotiations with uncertain outcomes and we have limited visibility given that the negotiations are being conducted between the USPS and our reseller integration partners, we believe it is reasonably possible that the margins associated and earned by the resellers as a result of these negotiations will begin to decrease around the second half of 2019.”

Stamps.com issued a 2019 earnings guidance within a range of $3.35 a share to $4.85 a share, a 35% cut on the bottom end of the range from its previous guidance.

“The STMP management team was completely caught off guard by the USPS’ proposed changes to the reseller program,” B. Riley analyst Zach Cummins said in a note to investors. “Although reseller agreements have been a source of scrutiny in recent years, it was surprising to see the USPS take such action given that reseller agreements have been a key contributor to the USPS’ shipping volume growth over the past 10 years.”

Wall Street expected Stamps.com to earn $5.42 a share in 2019, according to analysts surveyed by FactSet.

“Although we do not provide guidance beyond 2019, the current U.S. proposals, as we currently understand them, could also result in additional meaningful reductions in margins earned by resellers in 2020 and 2021,” Carberry added. “This in turn could have a significant impact on our revenues and earnings in those years.”

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