The U.S. Postal Service posted positive financial results for the first quarter of fiscal 2021 for the first time in several years, though it warned those encouraging results may not be sustainable.
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Total revenue for the quarter increased by $2.1 billion – or 11.1% – when compared with the same period last year, to $21.5 billion. The mail courier reported net income of $318 million.
There was a note, however, that the loss for the quarter would have been $650 million excluding adjustments that were made to non-cash workers’ compensation and a temporary peak surcharge.
The results were partially driven by a pandemic-related surge in holiday package volume – which grew by a record-breaking 25% with revenue up $2.1 billion as more people turned to ecommerce options. Overall, the Postal Service said 1.1 billion packages were delivered during the holiday season.
For the quarter overall, sales from the shipping and packages segment jumped by 42%, or $2.8 billion, on a volume increase of 435 million pieces.
The Postal Service expects its heightened package volume to abate somewhat when the U.S. economy reopens.
“Our strong growth in package volume during the holiday quarter shows how dramatically our business and revenue mix is shifting,” Postmaster General and CEO Louis DeJoy said in a statement. “While our positive financial results this quarter are certainly welcome, we continue to face systemic imbalances that make our current operating model unsustainable, and the economic impacts of the COVID-19 pandemic will continue to challenge the organization.”
While package volume grew, sales from mail services– the Postal Service’s largest sales category – declined. Marketing mail revenue dropped 5.6% year over year and First-Class mail revenue fell 2.7%.
Total operating expenses at the Postal Service continued to balloon. Associated costs were up $1.1 billion in the first quarter to $21.1 billion, an increase of 5.3% when compared with the same period last year.
The Postal Service also noted that it delivered a record number of mail-in ballots during the 2020 presidential election, 99.89% of which it said were delivered to election officials within issued guidance – the average time for delivery was 1.6 days.
Also on Tuesday, the USPS announced that Ron Bloom – a former Obama administration official – would serve as chair of the U.S. Postal Service Board of Governors.