The United States Postal Service posted surprisingly favorable financial results from the first quarter of 2016. A closer look at the numbers, however, reveals a sinking ship that's still far from being back on course.
The agency reported a 3.3 percent year-over-year increase in operating revenue for the first quarter of 2016, which ran from October 1 to December 31, 2015. The revenue jump can be attributed to a record volume of packages sent during the 2015 holiday season.
Furthermore, the USPS actually posted an net income gain of $307 million for the quarter, a $1.1 billion increase over the $754 million lost during the same period last year.
Rather than a sign that things are looking up for the beleagured independent agency, however, the income hike can be almost entirely attributed to a $1.2 billion decrease in workers compensation expenses thanks to interest rate changes—a factor outside of USPS control.
"While net income is favorable to a net loss, it unfortunately does not reflect the end of our losses," said USPS CFO Joseph Corbett. "Excluding the favorable impact of interest rate changes and the exigent surcharge, the organization would have actually reported a net loss of approximately $700 million in the first quarter."
Postmaster General and CEO Megan Brennan renewed her call for legislative reform, saying the agency's financial condition will only worsen without it. Corbett agreed, referencing the impending roll back of a congressionally-mandated exigent surchage in April, which will further accelerate USPS losses "by approximately $2 billion per year."
Overall mail volume was down 1.9 percent to 41.9 billion pieces, while the periodicals class fell 3.5 percent to just under 1.5 billion pieces.
The USPS has posted net losses in each of the last nine years, bleeding $5.1 billion in 2015, a slight improvement over the $5.5 billion lost the year before. The agency has tallied more than $50 billion in losses since 2007.
