U.S. Postal Service Loss Widens as Higher Costs Offset Revenue Growth

The U.S. Postal Service reported a wider loss for the fiscal year ended Sept. 30 as growth in shipping and package volume boosted revenue but also led to higher spending.

USPS has been competing for share in the growing market for package delivery spurred by an increase in e-commerce against shipping giants UPS and Federal Express, which also have been hit by higher costs.

USPS said its total revenue improved by 3.8% to $71.43 billion. However, excluding a boost from a change in USPS's accounting estimates for consumer usage of "forever" stamps, the growth was 2.3%.

In all, volume eased by 0.1% as growth in categories led by shipping and packages was offset by continued declines in first-class mail.

Operating expenses increased 4.2% as the growth in shipping and packages volume contributed to higher labor and transportation costs.

Postmaster General and Chief Executive Megan J. Brennan said the USPS spent $1.4 billion in the latest fiscal year for building improvements, vehicles, equipment and other capital projects, an increase of $206 million from the year-earlier period.

Excluding special items, such as prepaying retiree health benefits and certain changes in workers' compensation expenses, USPS reported controllable income of $610 million, compared with a year-earlier controllable income of $1.19 billion.

Over all, USPS reported a loss of $5.6 billion, compared with a year-earlier loss of $5.06 billion.

Write to Tess Stynes at [e-mail]

(END) Dow Jones Newswires

November 15, 2016 13:45 ET (18:45 GMT)

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