Quarter 3 Financial Results—Good or Bad?

Quarter 3 Financial Results—Good or Bad?
By Dan Mooney
NAPS North Central Area Vice President

USPS Quarter 3 FY25 financial results were just released (Aug. 11) as I write this column. So, what do the numbers tell us? Let’s look at Quarter 3 and the fiscal year as a whole and compare it to the plan. Keep in mind we had a net loss last year of $9.5 billion. That number attracted a lot of attention on Capitol Hill as we all know.

Quarter 3 had a net loss of $3.1 billion versus a net loss of $2.5 billion SPLY, for a year-to-date net loss of $6.25 billion (+$144 million, Quarter 1; -$3.3 billion, Quarter. 2; and -$3.1 billion, Quarter 3). The FY25 plan called for a $6.9 billion dollar loss.

Quarter 1 had a positive net income, the first time that happened in some time; folks were excited. But I told them to fasten their seat belts because the plan called for a loss equivalent to about $7 billion the rest of the fiscal year. Well, if we lose about $650 million in Quarter 4, we will make plan! If we lose a billion in Quarter 4—well, let’s not go there!

Can you imagine making plan and losing almost $7 billion? That would mean, on the macro level, the company and its employees, top to bottom, would have done their jobs to expectations—made plan and the company will lose $7 billion. Somehow that doesn’t seem right.

We all basically do what’s expected of us, yet the USPS still loses billions of dollars—to the tune of about $23 billion in FY23, FY24 and FY25. We started this fiscal year with $19.5 billion in cash and short-term investments; the plan is to end the year with $10.7 billion (if we make the estimated year-end lump sum payments for CSRS and FERS). As you can see, we can’t continue down this road.

At some point, this has got to stop fast. No company can withstand losses like that! I am praying our new leader somehow will be able to right this ship and set it sailing into black waters—not deep, red water. We need the PMG’s leadership and he certainly needs us! It’s time we team up and right the ship together; we need each other to get out of this situation.

Let’s look at what the other numbers tell us. Revenue, half of the profit equation, was basically flat for Quarter 3. Quarter 2 also was basically flat; Quarter 1 was up about $855 million or 4.1%. Total revenue plan for FY25 was an increase of $2.4 billion or 4.1% to a total of $82.9 billion.

That’s tells us unless Quarter 4 revenue is up approximately $1.5 billion to plan, we will come up short of our total revenue goal—despite raising prices. This also tells us we cannot price-increase our way out of this financial predicament alone. Remember, everyone has total revenue to plan on their NPA scorecard.

The FY25 plan called for a reduction of 5.1% in total mail and package volume/pieces. This mainly was driven by projected declines in First-Class and Marketing Mail.

Shipping and packages had a volume decline of 6.5% to SPLY. Quarter 2 volume was down 6.9% to SPLY; Quarter 1 had a volume decline of .9% to SPLY. Volume is down on the products of our future, the products for which we are building out our new network restructuring.

Marketing Mail had a volume increase of 0.5% compared to SPLY. Quarter 2 volume was down 5.7% to SPLY. Quarter 1 was up 7% to SPLY.

First-Class Mail had a volume decline of 5.4% compared to SPLY. Quarter 2 First-Class volume dropped 5.8% to SLPY. Quarter 1 had a 3.9% decline to SPLY.

We need to work together and find ways to reverse these numbers. Improving our service scores will be a big start. Working together (senior leadership, EAS, craft) will get us out of this predicament the fastest.

We all have something of value to help improve this situation. We all care deeply about the Postal Service and want it to succeed. Keep an open dialogue; give and take advice and feedback wisely.

Stay on the high road; the view and the people are much better!