U.S. Postal Service Revenue Rises on Shipping Growth, but Losses Mount

[mahatmakanejeeves]

Source: The Wall Street Journal.

U.S. Postal Service Revenue Rises on Shipping Growth, but Losses Mount

Overall volume edged down 0.2%

By Tess Stynes and Laura Stevens
[e-mail]
http://twitter.com/TessStynes
[e-mail]
http://www.twitter.com/laurastevenswsj

Aug. 9, 2016 10:29 a.m. ET

The U.S. Postal Service reported stronger revenue for the latest quarter, driven by continued growth in its shipping and package business, though higher costs contributed to mounting losses.

For the three months ended June 30, USPS said its total revenue increased 7% to $17.72 billion. However, excluding a boost from a change in USPS’s accounting estimates for consumer usage of “forever” stamps, the growth was 0.7%.

USPS had been anticipating added pressure on results with the April 10 expiration of an exigent surcharge, which USPS said reduced revenue in the latest quarter by roughly $450 million. The loss of the surcharge is expected to cut an additional $500 million from revenue in the current quarter and reduce USPS’s annual revenue by nearly $2 billion.

Overall volume edged down 0.2%, amid continued declines in first-class mail volume, while shipping and package volume increased 14%.

Read more: http://www.wsj.com/articles/u-s-postal-service-revenue-rises-on-shipping-growth-but-losses-mount-1470752985

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Previously at DU:

May 10: U.S. Postal Service Revenue Grows on Shipping Volume, Pricing

Here's a far more alarming take on the same news:

The US Post Office (USPS) Reports Steep Loss in Its Third Quarter

Interest rate hikes hurt the agency

Aug 9, 2016, 1:47 pm EDT | By Karl Utermohlen, InvestorPlace Writer

The US Post Office (USPS) has reported third-quarter results that paint an ugly picture of the agency’s business.

Earnings for USPS’ quarter lowered to a loss of $1.57 billion, marking a 268% increase compared to last year’s third quarter, when the agency lost $586 million.

Revenue increased 7.1% year-over-year to $17.7 billion. The agency’s weak earnings figures resulted from a change in workers’ compensation expense of $1.6 billion–a factor that is outside of USPS’ control.

A hike in interest rates further contributed to this loss. Mail volume also suffered a decline, sliding by 738 million pieces — or 0.2% — to a total of 36.73 billion pieces. ... The agency added that shipping and package revenue and volume rose by 10.6% and 13.4% compared to the year-ago’s quarter.

U.S. Post Office's loss nearly triples, while sales edge higher

Published: Aug 9, 2016 9:18 a.m. ET

By Tomi Kilgore
Reporter and editor

The U.S. Postal Services reported a fiscal third-quarter loss that widened to $1.57 billion from $586 million a year ago. The widening was due primarily to a $1.6 billion unfavorable change in workers' compensation expense as a result of interest rate changes. Revenue rose 7.1% to $17.7 billion, but was reduced by about $450 million by the expiration of an exigent surcharge. Total volume declined 0.2% to 36.73 billion pieces, as a 1.7% increase in standard mail volume, a 14% increase in shipping and packages and 5% growth in international was offset by a 3.4% decline in first-class mail and a 3.8% drop in periodicals. "Although the Postal Service achieved strong results in package delivery and Standard Mail volumes, only a slight increase in total revenue was recorded due to a mandated price reduction earlier this year," said Chief Financial Officer Joseph Corbett. "We incurred a net loss resulting, in part, from continued decreases in first-class mail volume and systemic financial imbalances associated with our retiree health benefit prefunding requirements."

[forest444]

1. How about an investigation into the UPS/FedEx stockholdings of all Rethugs who sponsored the '05 bil

that has been sabotaging the Postal Service's finances ever since?

I'd start with Grand Theft Issa, the chief sponsor.

[Bernardo de La Paz]

3. Losses started the year after, in 2006

[forest444]

7. Excellent. Really puts their 'shock-and-hock' plan for privatizing the Postal Service in evidence.

Grand Theft Issa must own millions in UPS/FedEx stock - to say nothing of all the campaign contributions he must have received.

Plus, maybe one of these:

[FighttheFuture]

8. Exactly!!! Burden the USPS with requirements NO OTHER business has, and its easy to see

what the problem if. Republicans who pushed this agency destroying legislation through in the first place!!!

[maxsolomon]

2. one of the 1st priorities of a Democratic-controlled House

is repealing that bullshit bill.

[Bernardo de La Paz]

5. Yes, unelect Darryl "Grand Theft Auto" Issa

[Plucketeer]

6. Indeed!

Stop the daily arsenic dose and the patient will recover!

[guillaumeb]

4. Some more information is needed:

The ad is also largely correct that a 2006 law, the Postal Accountability and Enhancement Act, requires the post office to make payments "into federal accounts." What the ad doesn't mention is the payments are meant to fund health benefits for future Postal Service retirees. The law requires that the Postal Service pay about $5 billion a year toward future health benefits for 10 years, until 2017. A 2009 report from the nonpartisan Congressional Research Service determined that the payments were having a "considerable" impact on the post office's profitability.

http://www.politifact.com/truth-o-meter/statements/2011/sep/29/save-americas-postal-service/ad-save-americas-postal-service-claims-rule-congre/

The PAEA was passed by a GOP Congress and signed by George W. Bush. It required the USPS to pay from 4.7 to 5.2 billion a year into the general funds, ostensibly to pre-fund retirees health benefits for the next 75 years. In other words, the USPS is paying for retires who have not even been born yet.

The true purpose of the bill was twofold.
One, the 5 billion a year was meant as an attempt to minimize the massive Bush deficits.
Two, the GOP has always pushed the meme that government does not work. The USPS is regularly rated number one and is the most efficient postal service in the world. This massive revenue drain was supposed to prepare the public for privatizing the USPS, allowing private companies to profit from delivering mail.


If you look at the 3rd quarter loss of 1.57 billion and weigh this loss against the approximately 5 billion the USPS must pay to boost Federal revenues, the main reason for the loss is seen.

[FighttheFuture]

9. +1000!!!

[Wilms]

10. Rec for exposure!

[Festivito]

11. Make PO pay to hold retirement account. See horrific losses! Privatize! Oops, all gone! Gov bailout!

It's a Romney money maker:
Bank loans. Buy company. Invest diversified retirement fund back into company. Pay self well. Leave with golden parachute. Faltering. Not us, we're gone. Uh-oh! Bankruptcy. Taxpayer bailout of retirement fund.

These stories always end with taxpayers paying back what the rich stole.

USPO is a much bigger prize. Every garage door gets an elevator behind it!

[Elmergantry]

12. We sell it at a loss...

..But make it up in volume!