USPS Posts $1.8B Income in Q1 Despite Mail Decline

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The U.S. Postal Service posted net income of $1.8 billion in the first quarter of fiscal year 2004, nearly $500 million less than a similar period last year, a postal official said yesterday at the agency's Board of Governors meeting in Fort Lauderdale, FL.

Chief financial officer Richard J. Strasser Jr. said revenue for the Oct. 1-to-Dec. 31 quarter was $18.2 billion, down $181 million, and expenses were $16.4 billion, up $272 million over the same period last year.

"We constrained expenses through our continuing efforts to control costs, increase productivity and reduce work hours," he said.

Historically, the USPS generates most of its annual revenue in the first quarter, which includes the heaviest mailing period.

Strasser said that overall mail volume dropped 0.3 percent to 54.0 billion while deliveries rose 1.7 million to 141.8 million. Standard Mail increased a modest 51 million pieces, or 0.2 percent.

"The revenue and volume trends are consistent with the projections relative to the first quarter that were included in our Financial Plan," he said. "Also in quarter 1, we continue to perform better than forecasted with regard to expenses."

Strasser added that he expects these trends to continue through the second quarter, after which mail volume in quarters 3 and 4 is expected to increase above last year's levels.

Strasser reported that work hours declined by 10 million, 3 million more than forecast, while productivity increased 1.7 percent.

The number of employees continues to decline through attrition, as employees choose regular or voluntary early retirement. In the quarter 8,462 employees left the workforce, bringing the career-employee total to 719,850.

In other activity yesterday, the board approved funding to support the sale of the underused Kansas City, MO, Main Post Office. The MPO operations and Mid-America District office will be relocated to the Kansas City Union Station and adjacent Railway Express Agency building.

The board also approved funding to build a new carrier annex in Santa Monica, CA, to resolve space deficiencies.

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