USPS reports $1.3 billion net loss, small gain in revenue
- By FederalSoup Staff
- May 10, 2018
Unlike many previous earnings reports, the U.S. Postal Service showed a small gain in total revenue, but its total net loss continued to grow in the second quarter.
USPS reported a total revenue gain of $235 million, up 1.4 percent from the same quarter last year, and now stands at $17.5 billion.
Shipping and Packages revenue increased by $445 million, or 9.5 percent, while First-Class and Marketing Mail revenue dropped by $181 million combined, according to the report.
Package volume grew by 69 million pieces, or 5.0 percent, while mail volumes continued to decline by 700 million pieces, or 2.1 percent, compared to the same quarter last year.
“Despite growth in our package business, our financial results reflect systemic trends in the marketplace and the effects of an inflexible, legislatively mandated business model that limits our ability to generate sufficient revenue and imposes costs upon us that we cannot afford,” Postmaster General and CEO Megan J Brennan, said.
The controllable loss for the quarter was $656 million, compared to controllable income of $12 million for the same quarter in 2017; a change driven by a $236 million increase in retiree health benefit costs, a $364 million rise in compensation expenses and a $155 million increase in transportation expenses, and the additional hours needed to support the package business and contractual wage adjustments.
Workers' compensation expenses fell by $658 million compared to the same quarter last year.
The most significant loss reported was its the net loss of $1.3 billion, compared to a total net loss of $562 million for the same period last year.
Unfunded retirement and retiree health benefits grew by a combined $766 million due to changes in actuarial assumptions.
"The continued secular decline in First Class mail, rising costs and legislative and regulatory constraints resulted in larger losses this quarter,” Chief Financial Officer Joseph Corbett said.
Read the full report here.