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Postal Service loses $5.2 billion in third quarter

Aug. 9, 2012 - 10:29AM   |  
By SEAN REILLY   |   Comments
U.S. Postal Service letter carrier Juan Padilla sorts bundles of mail as he walks his delivery route last year in San Francisco. The Postal Service on Thursday reported a $5.2 billion loss for the third quarter of fiscal 2012, up from $3.1 billion for the same quarter last year.
U.S. Postal Service letter carrier Juan Padilla sorts bundles of mail as he walks his delivery route last year in San Francisco. The Postal Service on Thursday reported a $5.2 billion loss for the third quarter of fiscal 2012, up from $3.1 billion for the same quarter last year. (Justin Sullivan / Getty)

The U.S. Postal Service on Thursday reported a $5.2 billion loss for the third quarter of fiscal 2012, up from $3.1 billion for the same quarter last year.

For the first nine months of 2012, the Postal Service has lost a total of $11.6 billion, compared with $5.7 billion at the same point last year, according to a news release.

For the third quarter, total mail volume fell to 38.5 billion pieces, down 3.6 percent from a year ago. The decline was steeper for first-class mail — the Postal Service’s most profitable line — which dropped 4.4 percent. A bright spot was the continued growth in shipping services and package revenue, which rose 9 percent to $3.3 billion.

The $15.6 billion in total operating revenue for the quarter was almost unchanged from last year, but operating expenses jumped more than 10 percent to almost $21 billion. That increase was driven by $3.1 billion in mounting liabilities for the quarter for legally required payments to cover health care benefits for future retirees.

On Aug. 1, the Postal Service defaulted on a $5.5 billion installment originally due last September for fiscal 2011; USPS leaders say they also lack the cash to meet a $5.6 billion payment due at the end of next month. Those obligations nonetheless remain on the agency’s books.

The Postal Service has long pleaded for an end to the requirement to pre-fund the health care expenses, but congressional action before the November election appears unlikely. Although a Senate-passed bill would shave billions of dollars from the existing yearly payment schedule, the House has not acted on a competing bill that would also provide some relief.

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