postalnews blog

The US Postal Service yesterday issued financial results for February. Click here for the Adobe .pdf version of the report, or here for the same data in an Excel spreadsheet.

Revenue for the month was up by 5.4% from the prior year, which is the amount of the rate increase implemented in January. Revenue from the mail was only up by 4.4% (page 3)- the rest of the increase in income came from investment income, services and appropriations.

For the fiscal year to date, revenue is up 2.2% to the prior year. All of the increased revenue came from commercial categories- permit imprint and presort. Sales of stamps and metered postage are actually down from the prior year by about 100 million year to date. Expenses have risen by 3.9%.

Net income for the year to date is $1.3 billion. Unfortunately, $1.25 billion of that is earmarked for the so-called escrow account, and will be unavailable to the Postal Service.

Mail volume was just about flat- up by 0.2% for the month, 0.1% year to date. First class volume was down 0.9% for the month, -1.5% year to date. Standard mail was up by 0.8% for the month, 1.4% for the year to date.

Express mail and Priority continued to show strong growth, but still represent less than ten percent of total USPS revenue. Together, they account for $220 million in additional revenue so far this year.

Read on for the USPS analysis comments from the report:

Analysis of the Financial and Operating Statements

Revenue

For February, Total Revenue was $121 million or 2.2% over plan, and $292 million or 5.5% over same period last year (SPLY).  Commercial Revenue was over plan by $55 million or 1.3% and Retail Revenue was over plan $47 million or 3.5%.  In February, combined Total Commercial Revenue and Retail Revenue were $254 million more than SPLY.  Most of the increase in revenue to SPLY for February was reflected in Presort First and Package Services/Permit Imprint, $106 million more. Also, Permit Imprint and Metered Postage revenue was $87 million and $66 million more than SPLY, respectively.    

Year-to-date, Total Revenue is $97 million or 0.3% over plan with the largest contributor being Retail Revenue at $429 million or 5.7% more than plan.  YTD, Total Revenue is $621 million over SPLY.  Primary contributors to the increase over SPLY were Permit Revenue at $590 million more and Other Retail Channels Revenue at $264 million more than last year. 

Expenses

For February, Total Expenses were $117 million or 2.1% above plan.  Personnel costs were $57 million or 1.3% above plan and non-personnel costs were above plan by $60 million or 5.2%.  Most of the non-personnel plan overrun was in Transportation at $16 million above plan and Depreciation at $5 million above plan.  Additionally, this month’s non-personnel expense includes a $67 million plan adjustment.  Compared to SPLY, this month’s Total Expenses were increased by $208 million or 3.9%.  The drivers of this increase over SPLY, included an increase in deliveries, increased fuel prices, health benefits and COLA costs.  

Year-to-date, Total Expenses were $117 million or 0.4% above plan.  Personnel costs are $221 million or 1.0% above plan, while non-personnel expenses are $104 million or 1.6% below plan.  The largest contributors to the non-personnel plan underrun are Supplies and Services at $85 million or 8.1% below plan and Transportation at $16 million or 0.6% below plan.  YTD Total Expenses are $1.1 billion or 4.0% above SPLY.

Mail Volume and Revenue 

Total Mail Volume for February, FY 2006 was 40 million pieces or 0.2% above SPLY.  Standard Mail volumes, at 65 million pieces or 0.8% above SPLY, remain positive primarily because of the increasing strength of direct marketing channels.   However, mail volumes were below SPLY for Periodicals, 47 million pieces or 6.1% and First-Class Mail, 65 million pieces or 0.9%.  

Year-to-date, Total Mail Volume is 0.1% or 62 million pieces over SPLY.  The most significant mail volume increase over SPLY for YTD is in the lower revenue-per-piece Standard Mail category, which increased 591 million pieces or 1.4%.  YTD, First-Class Mail volume is 1.5% less than SPLY generating $4 million less revenue than SPLY.

Capital Investments

The Fiscal Year 2006 Capital Commitments YTD through February 2006 are $374 million compared to a plan of $386 million.  This represents a plan underrun of about $11 million or 2.9%.   

The Cash Outlays YTD are $868 million versus a plan of $899 million, representing a $31 million underrun to plan. 

Workhours

Total Workhours for February 2006 were 0.8 million hours or 0.7% above plan, and 0.4 million hours or 0.4% below February 2005.  Together, City Delivery and Rural Delivery increased 0.2 million hours over SPLY. 

Total Workhours for February 2006 YTD are 9.6 million hours or 1.6% above plan, and 0.6 million hours below SPLY.  The most significant plan overruns lie in Mail Processing by 5.9 million hours, Delivery Services by 3.0 million hours, and Customer Services by 2.5 million hours.  YTD, major contributors to the workhours decrease to SPLY are City Delivery and Mail Processing workhours.  Combined these operations workhours are 2.0 million hours below SPLY.