USPS achieves positive net income despite volume drop
The U.S. Postal Service ended the first quarter of fiscal 2008 with net income of USD 672 million on revenue of USD 20.4 billion, according to preliminary financial results released Jan. 30.
Total revenue for the quarter ending Dec. 31 was up 3.5 percent over the same period last year primarily due to the May price change. The price increase masked weak volume for the quarter. Total mail volume declined 3 percent; First-Class Mail was particularly affected, declining by 3.9 percent.
“The economic downturn was the main factor for the volume decline, as the hard-hit financial and housing sectors are heavy users of the mail,” said Postmaster General John Potter. “I’m proud our managers and employees adjusted quickly to these changing market conditions, making a positive quarterly net income possible. Not only did they help us tighten our belt, but they provided record levels of service.”
Total expenses were USD 19.7 billion, versus 22.7 billion for the same period last year. The USD 3.0 billion difference was due to the one-time expense of funding retiree health benefits required in quarter one 2007 by the Postal Accountability and Enhancement Act of 2006. Excluding the one-time cost, expenses remained constant, despite rising fuel and labor costs. This was accomplished while serving an additional 1.7 million new addresses versus the same period last year.
The U.S. Postal Service ended the first quarter of fiscal 2008 with net income of USD 672 million on revenue of USD 20.4 billion, according to preliminary financial results released Jan. 30.
Total revenue for the quarter ending Dec. 31 was up 3.5 percent over the same period last year primarily due to the May price change. The price increase masked weak volume for the quarter. Total mail volume declined 3 percent; First-Class Mail was particularly affected, declining by 3.9 percent.
“The economic downturn was the main factor for the volume decline, as the hard-hit financial and housing sectors are heavy users of the mail,” said Postmaster General John Potter. “I’m proud our managers and employees adjusted quickly to these changing market conditions, making a positive quarterly net income possible. Not only did they help us tighten our belt, but they provided record levels of service.”
Total expenses were USD 19.7 billion, versus 22.7 billion for the same period last year. The USD 3.0 billion difference was due to the one-time expense of funding retiree health benefits required in quarter one 2007 by the Postal Accountability and Enhancement Act of 2006. Excluding the one-time cost, expenses remained constant, despite rising fuel and labor costs. This was accomplished while serving an additional 1.7 million new addresses versus the same period last year.
Note: 2007 quarterly results are being revised to make them comparable with 2008 results and bring them fully in accordance with SEC financial reporting requirements, as mandated by the Postal Act of 2006. These revisions changed the timing of some revenues and expenses within the year, without affecting the annual result. The revisions increased the 2007 first-quarter loss to USD 3.0 billion, up from the USD 2.7 billion loss reported last year. There also will be revisions to second- and third-quarter 2007 results. The annual net loss of USD 5.1 billion for 2007 is not affected.
