USPS reports a $562m net loss for Q2 FY2017
The US Postal Service (USPS) has reported a net loss of $562m for the second quarter (Q2) of fiscal year 2017. To put this in perspective, USPS racked up a net of loss of $2bn in Q2 FY 2016. So taken at face value, this was progress of a kind – but USPS benefited from declines in operating expenses outside of management’s control.
In a statement sent to Post&Parcel today (10 May), USPS explained: “Expenses for mandatory retiree benefit programs fell by a net $1.2 billion due to changes in funding requirements that took effect in 2017 according to law, while workers’ compensation expenses fell by $1.1 billion due largely to fluctuations in interest rates.”
USPS also repeated its complaint that it “cannot overcome systemic financial imbalances caused by legal and other constraints”.
The post operator said that it achieved a “modest” controllable income of $12m for the quarter – but stressed that this fell “well short” of the $576m for Q2 FY2016. According to USPS: “This reduction was driven by the April 2016 expiration of the exigent surcharge, which would have generated approximately $500 million in additional revenue during the quarter had it remained in place, and to a lesser extent, a $69 million increase in controllable operating expenses.”
Operating revenue for Q2 FY2017 was $17.3bn, down $474m from last year. Revenue from First-Class Mail and Marketing Mail fell $606m and $331m respectively, which USPS attributed to lower volumes (which were down by about 1.4bn pieces) and the aforementioned exigent surcharge expiration.
