CFO Richard J. Strasser Jr. told the Postal Service’s Board of Governors yesterday, that through the third quarter of fiscal year 2004, the Postal Service further reduced its debt and is on track to hold rates steady to 2006. Strasser cited increased productivity and a reduction in Civil Service retirement fund overpayments as the principal reasons for the positive outlook.
He said that despite slight revenue declines, the Postal Service achieved a net income of $259 million during the third quarter on revenues of $16.6 billion. Productivity gains of 1.8% were achieved by managing costs and employee complement. Also, energy-related expenses were about $80 million greater when compared to the same period last year, Strasser said, adding that these energy-related expenses are not passed onto the customer.
While daily deliveries grew 1.5 million, an increase of 200,000 from the second quarter to a total of 142.4 million nationwide, the growth in expenses was held to 2.8%. For the quarter, estimated mail volume increased 2%. The final determination of volumes will be included in the Postal Service’s Third Quarter Financial Report posted on www.usps.com within 45 days after the close of the period.
Thus far in fiscal year 2004, the Postal Service earned $2.8 billion net income on revenues of $52.1 billion, despite a modest decline in revenues. Strasser said he expects the Postal Service to maintain this level of performance in the fourth quarter. Revenue is expected to be slightly less than fiscal 2003, mail volume is expected to hold steady and, with continuing expense control, productivity will continue to improve.
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