USPS Ends Quarter 3 With $3.5 Billion Loss

USPS Ends Quarter 3 With $3.5 Billion Loss

The Postal Service ended the third quarter of fiscal year 2010 (April 1 – June 30) with a net loss of $3.5 billion, compared with a net loss of $2.4 billion for the same quarter last year. Third-quarter mail volume totaled 40.9 billion pieces — down approximately 700 million pieces, or 1.7 percent, compared to a year ago.

Complete USPS third-quarter results include operating revenue of $16 billion, some $294 million less than the same period last year, and operating expenses of $19.5 billion, an increase of $789 million, or 4.2 percent, over the third quarter last year.

Faced with continuing declines in mail volume, the Postal Service’s financial situation is compounded by its obligation to pay $5.4 billion to $5.8 billion annually to prefund retiree health benefits.

As a result, liquidity remains a major concern as the end of the fiscal year approaches, according to Chief Financial Officer Joe Corbett. Although cash flow appears to be sufficient for 2010 operations, it is uncertain whether cash flow, together with maximum available borrowing of $3 billion, will be enough to fund the Congressionally mandated $5.5 billion payment Sept. 30 to the Retiree Health Benefit Fund and retain sufficient liquidity into 2011.

The Postal Service has incurred net losses in 14 of the last 16 fiscal quarters. The fiscal 2010 year-to-date net loss is $5.4 billion, compared to a loss in the same period last year of $4.7 billion.

Workhours were reduced by 63 million in the first three quarters of fiscal 2010, or 6.6 percent compared to the first three quarters of 2009. That is the equivalent of about 36,000 full-time employees.

Despite aggressive cost-cutting efforts, USPS has continued to maintain a high level of customer service.