Postal Service First-Quarter Results Reflect Drop in Mail Volume
WASHINGTON, DC — The U.S. Postal Service announced that mail volume was down 3.0 percent, or 1.7 billion pieces, for the first quarter of fiscal 2008, according to preliminary financial results presented today to the Postal Service Board of Governors.
First-Class Mail volume decreased 3.9 percent and Standard Mail decreased 2.6 percent in the quarter ending Dec. 31, 2007.
Chief Financial Officer and Executive Vice President H. Glen Walker attributed the declining mail volume to “disturbing trends” in the overall U.S. economy.
“Unfortunately, two key sectors of the economy — finance and housing — suffered a downturn in the first quarter, and they’re both heavy users of the mail,” said Postmaster General John Potter.
Net income for the first quarter is estimated at $672 million on revenue of $20.4 billion.
“Although revenue is higher than in the same quarter last year, due to the price increase last May, it is $500 million less than expected,” Potter said. “We’re working to offset the disappointing revenue with cost reductions and new strategies for growth.”
Final first-quarter financial results will be released in February.
First Quarter Service Scores
National on-time performance scores for the delivery of First-Class Mail hit all-time first-quarter highs in two of the three categories the Postal Service tracks. National overnight service was 96 percent on-time – a first for three quarters in a row. Two-day service was 93 percent on-time. Three-day performance was 88 percent, a two-point improvement over the same period last year.
“These are excellent service scores for the first quarter,” said Potter, ”especially given winter weather conditions and our busiest mailing season.”
First-Class Mail performance is measured independently by IBM Global Business Services. The process measures First-Class Mail from the time it is deposited into a collection box until it is delivered to a home or business.
Other Board Action
The Board today approved three facility projects: expansion of the processing and distribution centers in West Sacramento, CA, and Providence, RI, and the purchase and renovation of an existing building and site to serve as the Perris, CA, Delivery Distribution Center.
Postal Service Ends Year With Record Revenue But High Fuel Costs Boost Expenses; Positive Productivity Trend Continues
WASHINGTON, Nov. 15 — Record levels of revenue and volume
helped the U.S. Postal Service conclude its 2006 fiscal year with net income of
$900 million, but increases in fuel and labor costs limited the overall
financial success.
The FY2006 year-end financial figures were released today by Chief Financial
Officer and Executive Vice President H. Glen Walker during the November meeting
of the Board of Governors. The Postal Service’s 2006 fiscal year began Oct. 1,
2005, and ended Sept. 30, 2006. Total revenue was $72.8 billion, and total
expenses were $71.9 billion. The net deficiency, after including a $3 billion
escrow allocation, as required by law, was $2.1 billion.
Fuel and transportation costs totaled approximately $1.7 billion in FY2006,
or $260 million more than anticipated, according to Walker. As one of the
nation’s largest transportation and delivery organizations, the Postal Service
is extremely sensitive to changing energy costs. Overall, total expenses
increased by 4.9% over the previous year.
Total mail volume increased in FY2006 by 1.4 billion pieces, or 0.7%. While
the mail volume decline trend continued for First-Class Mail (0.5% decrease from
the previous FY), Walker said growth in Standard and Priority Mail helped
increase overall mail volume to 213 billion pieces.
Walker also reported that the fiscal year ended with a record seventh
consecutive year in positive total factor productivity (TFP). The Postal Service
uses TFP to measure the change in the relationship between outputs, or workload,
and all the resources used in producing these outputs. Total Factor Productivity
increased by 0.4% in FY2006.
USPS June Financials Released
From USPS News Link:
Net deficiency of $594.5 million posted after escrow allocation
USPS revenues for June were $27 million, or 0.4% under plan and 5.6% more than June 2005. Expenses for the month were $39 million, or 0.7% under plan and 4.4% more than June 2005. The result is a net loss of $11.9 million before the escrow allocation. The net deficiency after escrow allocation is $261.9 million.
Year-to-date (YTD) revenue through June is 3.9% higher than the same period last year (SPLY) and is $386 million above plan. YTD expenses are 4.2% higher than SPLY and $222 million over plan. YTD total mail volume is 0.9% above SPLY.
YTD, net income before escrow allocation is $1.66 billion. However, our net deficiency after the escrow allocation is $594.5 million.
Contributing to the YTD performance was the new postage rate structure implemented Jan. 8, which provided a 5.4% revenue increase needed to fulfill the requirement of Public Law 108-18, The Postal Civil Service Retirement System (CSRS) Funding Act, enacted in 2003. This law requires the Postal Service to hold $3 billion in an escrow account by Sept. 30, 2006, to cover the difference between the CSRS retirement costs before and after the implementation of this law. We are allocating $250 million per month for purposes of assessing our financial position. (more…)