The U.S. Postal Service reported a $1.57 billion loss in its fiscal third quarter on revenues that ticked up 0.7 percent to $16.6 billion compared with the same 2015 period as increased package volumes were offset by higher operating costs.
The U.S. Postal Service (USPS) reported a net loss of $1.57 billion in its fiscal third quarter, which ended June 30, 2016, compared with a $586 million loss during with the same period in 2015, according to its most recent financial statements.
USPS saw revenues tick up 0.7 percent to $16.6 billion compared with fiscal third quarter 2015 despite overall volumes slipping 0.2 percent year-over-year to 36.7 million units for the quarter.
Standard mail volumes grew 1.7 percent from the third fiscal quarter of 2015 to 19.1 billion units, while international and other shipments jumped 5 percent and 23.2 percent, respectively, to 229 million units and 117 million units.
Volumes of first-class mail and periodicals, however, fell 3.4 percent year-over-year to 14.6 billion units and 3.8 percent to 1.4 billion units.
The shipping and packages segment saw revenues jump 18 percent to $645 million compared with the prior year thanks in part to a 13.6 percent increase in volumes to 1.2 billion units.
Revenue and volume improvements, however, were more than offset by a 12.4 percent increase in operating expenses during the third fiscal quarter. Higher compensation and transportation costs from e-commerce deliveries in particular contributed to the $19.3 billion in overall operating expenses for the quarter.
Labor costs increased by $387 million, largely due to the increase in shipping and packages volumes, while transportation costs increased by $97 million compared with third quarter 2015.
“We continue to post double-digit gains in package volume and are well-positioned operationally for further growth. Our capital investments are enabling increased efficiencies across the enterprise and improving experiences for our customers,” Postmaster General and CEO Megan J. Brennan said of the results. “Despite the encouraging numbers, net losses continue to mount. Our results in the quarter further underscore the need for legislative reform that provides the organization with greater financial stability.”
“Although the Postal Service achieved strong results in package delivery and Standard Mail volumes, only a slight increase in total revenue was recorded due to a mandated price reduction earlier this year,” added Chief Financial Officer Joseph Corbett. “We incurred a net loss resulting, in part, from continued decreases in First-Class Mail volume and systemic financial imbalances associated with our retiree health benefit prefunding requirements.”
USPS posts massive quarterly loss despite rising revenues
