Postal Service 'controllable income' rises in second quarter
Despite a continuing drop in first-class mail volume, the United States Postal Service recorded a slight gain in "controllable income" in the second quarter ended March 31.
Postmaster General Megan J. Brennan told reporters May 8 the gains were not strong enough to signal an end to the Postal Service's continuing financial woes.
The USPS still needs congressional help to resolve its long-term financial issues, she said.
For the lastest quarter, the USPS reported controllable income of $313 million compared to $261 million a year ago.
For the six months its controllable income was $1.4 billion, up slightly more than $1 billion from the previous year.
Brennan expressed delight at those numbers, saying they illustrate that the USPS has "cost containment and revenue strategies" that are working.
In response to a question about whether those numbers show that the Postal Service has fully righted its financial ship, she and Joseph Corbett, the Postal Service's chief financial officer, said that the Postal Service remains, as Corbett put it, in a "hole $90 billion deep."
The controllable income figures are derived by subtracting from the Postal Service's income figures that are beyond its control, such as the cost of a congressionally mandated payment of health costs for future postal retirees and workers' compensation claims.
The USPS has been unable to make those payments for several years, which has created a large deficit.
If those numbers are added to the second quarter, the USPS recorded a $1.5 billion loss, compared to a loss of $1.9 billion in the same period a year ago.
Its six-month loss totaled $2.2 billion, essentially the same amount as recorded in the first half of the last fiscal year.
Brennan cautioned that the USPS is facing "strong headwinds" with the continuing decline of first-class mail volume, and needs stronger revenues to make needed improvements, such as newer delivery vehicles, to the nation's mail system.
She and Corbett both expressed concern that a federal appeals court has yet to rule on the Postal Service's appeal of a proposed end to an emergency rate increase that has boosted USPS revenues significantly.
Fredric Rolando, president of the National Association of Letter Carriers, said the results "show the impressive Postal Service financial turnaround continuing in full force."
He said that $1.4 billion in controllable income is more than the Postal Service reported for all of the past fiscal year.
"Equally encouraging is what produced the operating profit — continuing revenue growth as an improving economy and rising online shipping drive better performance in letter mail and package deliveries," Rolando said.
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