* Postal Service reports $297 mln loss in fiscal Q1
* Warns may not meet large payment obligations
* Faces pressure from recession, email
WASHINGTON, Feb 9 The U.S. Postal Service
posted a loss of $297 million for the first quarter of its
fiscal year, blaming the recession and the use of electronic
The loss marked a slight improvement over the prior-year
period due to cost cutting, but the Postal Service warned the
continued negative trend "raises significant uncertainty" about
its ability to generate enough cash to meet large payment
obligations later this year.
"Unfortunately, economic drivers that significantly affect
mail volumes, such as continuing high unemployment levels and
lower investments, appear to be lagging general economic
recovery," said Joseph Corbett, chief financial officer and
executive vice president, in a statement.
The Postal Service, which delivers nearly half of the
world's mail, has posted net losses since 2007.
The first quarter of its fiscal year, which ends Dec. 31,
is typically the strongest quarter for the Postal Service
because of seasonal business and holiday mailings.
The Postal Service said the first-quarter loss was not
unexpected, due to unprecedented declines in mail volume that
began in 2008 and are related to the recession.
It is also facing head winds from the migration to
electronic mail and competition from FedEx (FDX.N) and United
Parcel Service (UPS.N).
"This trend is expected to continue," the Postal Service
said about the losses.
Further, the Postal Service warned it may not be able to
meet obligations to make substantial cash payments in September
and October 2010.
The Post Service is due to make payments of about $6.6
billion to prefund retiree health benefits and for its workers'
Last year Congress restructured similar payments, but there
is not assurance that similar adjustments will be made this
year, the Postal Service said.
(Reporting by Karey Wutkowski; Editing by Steve Orlofsky)