The US Postal Service (USPS) ended the first quarter of fiscal 2008 with net income of $672 millionon revenue of $20.4 billion, according to preliminary financial results. This was despite a 3% drop
in mail volumes due to the weakening US economy.Total revenue for the quarter ending Dec. 31 was up 3.5% over the same period last yearprimarily due to the May price change, USPS announced. But the price increase masked weak volumefor the quarter. Total mail volume declined 3%; First-Class Mail was particularly affected,declining by 3.9%.
Total expenses were $19.7 billion, versus $22.7 billion for the same period last year. The$3.0 billion difference was due to the one-time expense of funding retiree health benefits requiredin quarter one 2007 by the Postal Accountability and Enhancement Act of 2006. Excluding theone-time cost, expenses remained constant, despite rising fuel and labour costs. This wasaccomplished while serving an additional 1.7 million new addresses versus the same period lastyear.
“The economic downturn was the main factor for the volume decline, as the hard-hit financialand housing sectors are heavy users of the mail,” said Postmaster General John Potter. “I’m proudour managers and employees adjusted quickly to these changing market conditions, making a positivequarterly net income possible. Not only did they help us tighten our belt, but they provided recordlevels of service.”
“Because mail volume for the rest of the year is uncertain, we’ll continue to streamlineoperations to manage expenses and improve on-time delivery to provide even greater value to theAmerican people,” said Potter. “We also intend to take full advantage of the pricing flexibilityafforded by the new law, work with customers to better meet their needs, and find new ways to growrevenue.”
