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USPS Sees Revenue Rise but Net Loss for First Fiscal Quarter 2019

USPS
USPS Sees Revenue Rise but Net Loss for First Fiscal Quarter 2019

The US Postal Service saw a 2.9% increase in revenue in the first fiscal quarter of 2019, year-over-year, to $19.7 billion. The USPS had a net loss of $1.5 billion for the quarter, however.

Shipping and Packages revenue increased by $516 million, or 8.7%, on volume growth of 93 million pieces, or 5.4 percent, compared to the same quarter last year. First-Class Mail revenue declined by $81 million, or 1.2%.

The USPS pointed out that “controllable loss” for the quarter was $103 million, compared to controllable income of $353 million for the same quarter last year. Controllable loss is defined as net loss adjusted for items outside of management’s control and non-recurring items, including workers’ compensation expenses caused by actuarial revaluation and discount rate changes, and the amortization of Postal Service Retiree Health Benefits Fund (PSRHBF), Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS) unfunded liabilities.

The USPS called for legislative and regulatory changes in order to return to financial stability.

“We remain focused on aggressive management of the business, legislative reform, and pricing system reform, all of which are necessary to put the Postal Service on firm financial footing,” said Postmaster General and CEO Megan J. Brennan

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Press release follows:

The U.S. Postal Service reported total revenue of $19.7 billion for the first quarter of fiscal 2019 (October 1, 2018 – December 31, 2018), an increase of $553 million, or 2.9 percent, compared to the same quarter last year.

First-Class Mail revenue declined by $81 million, or 1.2 percent, on a volume decline of 428 million pieces, or 2.8 percent, compared to the same quarter last year. Meanwhile, Marketing Mail revenue increased by $218 million, or 4.9 percent, on volume growth of 1.0 billion pieces, or 4.8 percent, compared to the same quarter last year. Shipping and Packages revenue increased by $516 million, or 8.7 percent, on volume growth of 93 million pieces, or 5.4 percent, compared to the same quarter last year.

Total operating expenses were $21.2 billion for the quarter, an increase of $1.6 billion, or 7.9 percent, compared to the same quarter last year. Excluding the impact of the $621 million non-cash workers’ compensation expense increase resulting from changes in interest rates and actuarial assumptions, operating expenses would have been $20.6 billion for the quarter, an increase of $939 million, or 4.8 percent, compared to the same quarter last year. The remaining operating expense increase was largely driven by increases in compensation and benefits of $657 million, due to additional hours and contractual wage adjustments, and transportation costs of $207 million, due to higher fuel costs and highway contract rate inflation.

The net loss for the quarter totaled $1.5 billion, an increase in net loss of nearly $1.0 billion compared to the same quarter last year.

“We continued to drive growth in our package business and expanded use of the marketing mail channel during the quarter. Nevertheless, we face ongoing financial challenges. We remain focused on aggressive management of the business, legislative reform, and pricing system reform, all of which are necessary to put the Postal Service on firm financial footing,” said Postmaster General and CEO Megan J. Brennan. “Our nation is best served by a financially sustainable Postal Service that can invest in its future and meet the evolving mailing and shipping needs of the American public.”

The controllable loss for the quarter was $103 million, compared to controllable income of $353 million for the same quarter last year.

“Overall volumes increased this quarter driven primarily by growth in Marketing Mail and our package business, which resulted in total revenue growth of $553 million,” said Chief Financial Officer and Executive Vice President Joseph Corbett. “This growth was offset by increased work hours and related salaries and benefits, increases in transportation costs due to these higher volumes and the continued focus on meeting customers’ needs.”

Selected First Quarter Fiscal 2019 Results of Operations and Controllable (Loss) Income
This news release references controllable (loss) income, which is not calculated and presented in accordance with accounting principles generally accepted in the United States (GAAP). Controllable loss is defined as net loss adjusted for items outside of management’s control and non-recurring items. These adjustments include workers’ compensation expenses caused by actuarial revaluation and discount rate changes, and the amortization of Postal Service Retiree Health Benefits Fund (PSRHBF), Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS) unfunded liabilities.

Financial results in the Form 10-Q are available at http://about.usps.com/what/financials/

The full press release is available on the USPS website and includes charts and tables.

SOURCE: USPS Press Release

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Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

One thought on “USPS Sees Revenue Rise but Net Loss for First Fiscal Quarter 2019”

  1. The USPS will likely ALWAYS lose money as my experience suggest it is stuck in the past. Not long ago I sent a written letter to its female head in Washington outlining various complaints and suggestions for improvement. This was based on a 1st-hand experience running a multi-million dollar business & a chance meeting I had with a postal commissioner during a flight to Washington where I was headed for a speech I was to make before a non-profit on creating profit centers.
    The USPS is top-heavy with medical insurance costs and early retirement expenses the private sector does not have. They’ve taken some steps to short-circuit this. They also consume the most fuel in the US, so far they aren’t doing much to explore other fuels such as propane, as an example.
    I won’t include all the details here but the biggest take-away was she never responded to my letter. Instead, I got an E-MAIL asking me for a survey of how the USPS responded!
    A complete failure on their part and largely indicative of their overall problem-a failure to communicate or address their issues!

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