USPS reports a $562m net loss in Q2

United States Postal Service (USPS) has reported a 2017 Q2 net loss of US$562 million. This seems on course to roughly match the $2 billion losses made by the postal operator in Financial Year 2016.

In a statement, USPS explained: “Expenses for mandatory retiree benefit programs fell by a net $1.2 billion due to changes in funding requirements that took effect in 2017 according to law, while workers’ compensation expenses fell by $1.1 billion due largely to fluctuations in interest rates.”

USPS also repeated its complaint that it “cannot overcome systemic financial imbalances caused by legal and other constraints”.

The post operator said that it achieved a “modest” controllable income of $12m for the quarter – but stressed that this fell “well short” of the $576m for Q2 FY2016. According to USPS: “This reduction was driven by the April 2016 expiration of the exigent surcharge, which would have generated approximately $500 million in additional revenue during the quarter had it remained in place, and to a lesser extent, a $69 million increase in controllable operating expenses.”

Operating revenue for Q2 FY2017 was $17.3bn, down $474m from last year. Revenue from First-Class Mail and Marketing Mail fell $606m and $331m respectively, which USPS attributed to lower volumes (which were down by about 1.4bn pieces) and the aforementioned exigent surcharge expiration.  
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