The Postal Service saw revenues drop by hundreds of millions during its third quarter, the agency announced Monday.
From Feb. 22 to May 16, revenues totaled $16 billion, about $483 million below what the agency had estimated for the third quarter. Expenses were $15.8 billion, or $370 million less than the agency anticipated.
The savings were not enough to hold off the larger-than-expected revenue shortfall, according to agency Chief Financial Officer Richard Strasser. As a result, net income for the quarter was $224 million, which is $112 million less than expected.
Strasser, discussing the numbers Monday with the agency's board of governors, blamed the revenue decline on stagnant mail volume. For the second consecutive quarter, there was no growth in mail volume. In fact, First Class mail fell 2.4 percent from the same time last year. Standard mail-mostly advertising mail-grew by 3.2 percent. It was projected to grow by 3.5 percent over the same period as last year.
To date, agency revenues stand at $48.8 billion, about $1 billion under plan, while expenses were $1.44 billion below plan. If cost-saving measures-mainly reductions in workhours and attrition-continue, the agency should end the year $600 million in the black, Strasser predicted. That does not include money the agency will recoup thanks to a law altering how the Postal Service contributes to the Civil Service Retirement System.
The Postal Service currently operates under different accounting periods than other organizations. Starting next year, the agency will report its financial numbers at the same time as most companies.
NEXT STORY: Expanded Electronic Government