U.S. Postal Service reports $1.3 billion profit in first quarter
By Bill McAllister, Washington Correspondent
Helped by a surge of Christmas parcels, the United States Postal Service reported an operating profit of $1.3 billion in the first quarter of fiscal 2016, which ended Dec. 31, 2015.
That compares to a $1.1 billion operating profit during the same period of fiscal 2015 (Oct. 1, 2014, to Dec. 31, 2014).
Postal Service officials cautioned at a press briefing Feb. 9 that the good results were “not a bellwether” for the full year, in the words of Joseph Corbett, chief financial officer for the USPS.
He warned that loss of the exigent rate increase in April would cost the Postal Service $2 billion this year, and that the first quarter is typically the Postal Service’s strongest period.
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Revenues totaled $19.3 billion in the three months that ended Dec. 31, 2015, versus $18.7 billion for the same period in the previous fiscal year.
When the effects of legislative mandates such as the costs of funding retiree health care are included, the Postal Service said, the first quarter resulted in a net profit of $307 million, versus a net loss of $754 million in the same period of fiscal 2015.
Postmaster General Megan Brennan said in a news release: “Despite these achievements and the best efforts of our employees, our financial condition will worsen without legislative reform.”
It is a “serious but solvable” issue for Congress to resolve, she said.
The strong package growth was offset by continuing declines in first-class and standard mail, Corbett noted.
Christmas and other holiday greeting card volume dropped by 4.4 percent this fiscal year while packages surged about 18 percent, Brennan said, crediting the pricing of Postal Service parcels for the surge.
Brennan said she was continuing to seek mailer support for making the higher emergency rates permanent instead of rolling back stamp prices in April.
A group of large mailers have said they are opposed to making the price increases permanent, dampening prospects for quick passage of the financial relief legislation that three successive postmasters general have sought from Congress.
Fredric Rolando, president of the National Association of Letter Carriers, said the good results “aren’t a fluke” and show the impact of an improving economy and “Internet-driven online shopping,” which boosted parcel growth.
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