USPS reports losses of $3.3 billion
The U.S. Postal Service (USPS) ended the first three months of its 2012 fiscal year with a net loss of $3.3 billion — and large losses are expected to continue until planned restructuring efforts have taken place, the agency said Feb. 9.
Total revenue fell 1.1% year-over-year to $17.7 billion, the Postal Service said in its 2012 Q1 financial statement.
Mailing services revenue, excluding First-Class Mail parcels, totaled $14.5 billion, a decrease of 2.9% when compared with the first quarter of fiscal 2010. First-Class Mail continued to decline, with revenue decreasing 4.1% compared to the same period last year.
Declines in First-Class and Standard Mail revenue totaling $650 million accounted for 3.7% percent of the agency's total revenue. The USPS said that First-Class Mail revenue has declined nearly 15% and volume has declined 25% since 2006. While some of the decline is attributable to economic weakness since 2007, the Postal Service said the more significant factor is the continuing transition to electronic alternatives.
“Technology continues to have a major impact on how our customers use the mail,” said postmaster general and CEO Patrick Donahoe, in a statement. “While it has helped us grow our Shipping Services businesses, it has had a significant negative impact on some of our much larger sources of revenue, particularly First-Class Mail.”
The Postal Service's Shipping Services business's revenue totaled $2.8 billion, an increase of 7% over the same period last year.
The Postal Service said it continues to suffer from a severe lack of liquidity. “Absent significant changes in the law to allow normal commercial freedoms, the Postal Service will default on both retiree health benefits pre-payments to the federal government due this year,” said CFO Joe Corbett in a statement. “Even if legislation changes or eliminates the prefunding payments, we may reach our $15 billion debt ceiling in the fall of this year.”
The Postal Service's 2012 fiscal Q1 was for the three months beginning Oct. 1, 2011 and ending Dec. 31.