U.S. Postal Service Reports Third Quarter Fiscal Year 2022 Results

The U.S. Postal Service today announced its financial results for the third quarter of its fiscal year 2022 (April 1, 2022 – June 30, 2022). The enactment of the Postal Service Reform Act (PSRA) on April 6, 2022, significantly impacted the financial condition of the Postal Service, as it repealed the requirement that the Postal Service annually prepay future retiree health benefits and canceled all past due prefunding obligations. These impacts are reflected as a one-time, non-cash benefit of $59.6 billion to net income for the quarter.

The Postal Service had adjusted loss of $459 million for the quarter, compared to an adjusted loss of $41 million for the same quarter last year. Adjusted loss excludes the impact of the PSRA, retiree health benefits expense, non-cash workers’ compensation adjustments for the impacts of actuarial revaluation and discount rate changes, which are outside of management’s control, and amortization expenses for the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS) unfunded liabilities. On a U.S. generally accepted accounting principles (GAAP) basis, the Postal Service had net income of $59.7 billion for the quarter, compared to net loss of $3.0 billion for the same quarter last year, due almost exclusively to the non-cash impact of the PSRA.

“Our strong on-time delivery results and revenue growth this quarter demonstrate that we are making appreciable progress in implementing our Delivering for America plan and becoming the high performing organization the public expects and deserves,” said Postmaster General and CEO Louis DeJoy. “The one-time, non-cash benefit we recorded due to the enactment of postal reform legislation was significant, but also distortive. The fact of the matter is that we have a long road and a lot of hard work ahead in our 10-year transformation to ensure the long-term financial sustainability of the Postal Service, but we are confident that we will achieve what we have set out to accomplish.”

The Postal Service’s operating revenue was $18.7 billion for the quarter, an increase of $257 million, or 1.4 percent, despite a volume decline of 201 million pieces, or 0.7 percent, compared to the same quarter last year.

Marketing Mail revenue increased $324 million, or 9.4 percent, compared to the same quarter last year, on volume growth of 545 million pieces, or 3.5 percent. Marketing Mail experienced steep volume declines at the onset of the pandemic but has been rebounding as the economy continues to recover. Marketing Mail has generally proven to be a resilient marketing channel, and its value to U.S. businesses remains strong due to healthy customer returns on investment and better data and technology integration.

First-Class Mail revenue was essentially flat, compared to the same quarter last year, despite a volume decline of 620 million pieces, or 5.1 percent. First-Class Mailvolume continued to decline due to on-going migration from mail to electronic communication and transaction alternatives and remains lower than pre-pandemic levels.

Shipping and Packages revenue decreased $85 million, or 1.1 percent, compared to the same quarter last year, on a volume decline of 92 million pieces, or 5.0 percent, compared to the same quarter last year. Shipping and Packages volume remains higher than pre-pandemic levels despite the volume decline compared to the same quarter last year, due to the prior year pandemic-related surge in e-commerce.

The pandemic has significantly transformed the mix of mail and packages processed through the Postal Service’s network and the Postal Service anticipates that its volumes and mix will not return to pre-pandemic levels. The Postal Service continues to grow its mail services revenue through optimization of its pricing strategies and effective use of its pricing authority, as outlined in the Delivering for America plan.

Adjusted loss grew by $418 million, compared to the same quarter last year, despite the increase in revenue, due to inflationary impacts on several operating expense categories. Compensation and benefits expense increased $198 million, or 1.6 percent, primarily due to wage increases in our labor agreements tied to inflation, and in particular the impacts of cost of living adjustments. Highway transportation expense increased $131 million, or 10.1 percent, primarily due to the inflationary impacts of higher average diesel fuel costs. Other operating expense increased $373 million, or 14.9 percent, as inflationary pressures have led to higher average fuel prices for delivery vehicles and an increase in rent and utilities.
more at: https://about.usps.com/newsroom/national-releases/2022/0809-usps-reports-third-quarter-fiscal-year-2022-results.htm

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