Bolstered by election-related mailings, the U.S. Postal Service experienced something unusual in October -- profitability.
USPS released preliminary financial results late yesterday showing net income of $61 million last month, the first month of Fiscal Year 2013, versus a budgeted loss of $244 million and last year's loss of $139 million.
If not for a $467 million charge for prefunded retiree health benefits, the agency's net would have been $528 million -- a profit margin of more than 8% on revenues of $6.03 billion. Those prepayments have been likened to an interest-free loan to the federal treasury that are designed to obscure the true size of the federal budget deficit. (See Congress Hears the Truth About Postal Service Finances.)
The volume of Standard mail -- derided as "junk mail" by critics -- was up 16% over October 2011. Standard class revenue rose only 10%, evidence that the big volume increase was concentrated in the kind of low-priced mass mailings of letters used by political campaigns.
Also helping the bottom line was better productivity: The Postal Service delivered 9% more mail pieces than in October 2011 but needed only 3% more work hours to accomplish that.