Postal Service fiscal Q1 net loss hits $329M
The US Postal Service saw a net loss of $329 million in its fiscal 2011 first quarter, which ended December 31, 2010. The organization also warned that, without reform, it could default on some financial obligations to the federal government by the end of this fiscal year.
The USPS saw a net loss of $297 million in 2010's fiscal first quarter. The Postal Service's revenue was down 2.7% year-over-year to $17.9 billion in the fiscal first quarter, while total volume increased 1.5% to 46.4 billion pieces.
“The Postal Service continues to seek changes in the law to enable a more flexible and sustainable business model,” said Patrick Donahoe, postmaster general and CEO of the USPS. “We are eager to work with Congress and the administration to resolve these issues by the end of the fiscal year.” A Postal Service representative referred requests for comment to the organization's earnings statement.
Revenue from mailing services decreased 3.3% year-over-year to $15.3 billion, while revenue from shipping services improved by 1.7% to $2.6 billion compared with the same period of 2010. Shipping volume increased 2.4% year-over-year in the quarter to 422 million pieces. The USPS decreased work hours in fiscal Q1 by 2.4 million hours or 2.1%.
First-Class Mail volume was down 5.6% year-over-year to 20 billion pieces, while Standard Mail volume improved by 8.7% to 23.8 billion pieces. Periodicals mail was steady in the quarter at 1.9 billion pieces.
However, the USPS said it would have seen income of $226 million in fiscal Q1 if not for the cost of prefunding retiree healthcare benefits and noncash adjustments to the workers' compensation liability. The organization has urged Congress to fix those issues, which the USPS says cost the organization billions of dollars a year. The USPS lost $8.5 billion in FY 2010.