USPS loses $5.2 billion in third quarter
August 9, 2012 - The United States Postal Service reported a $5.2 billion net loss for the third quarter of the fiscal year, which the mail agency attributes to a continuous volume decline of First-Class Mail and a mandatory $3.1 billion payment for prefunding of retiree health benefits.
Last week, USPS said, it defaulted on a $5.5 billion prefunding payment for retiree health benefits due to lack of cash. USPS believes it will also default on a second payment of $5.6 billion, which is due by Sept. 30. In a statement, the agency warned it has "very low levels of cash" and may not be able to borrow through October.
Despite the significant overall loss, revenue from shipping services and package delivery for the quarter was up 9 percent, totaling $3.3 billion. Total mail volume (38.5 billion pieces) fell 3.6 percent, and operating revenue ($15.6 billion) decreased less than 1 percent. Operating expenses increased 10.2 percent to $20.8 billion. Year-to-date losses total $11.6 billion compared to $5.7 billion for the same period last year.
USPS is continuing to urge Congress to approve its Postal Service Business Plan, which includes the transition to a five-day weekly mail delivery schedule and the elimination of prefunding for retiree health benefits, among other plans.
By Elizabeth A. Reid