Business News Roundup, Feb. 10

A strong holiday shipping season and a couple of favorable economic situations temporarily turned around the financial fortunes of the Postal Service, officials said Tuesday.

The post office reported a $307 million profit between October and December, compared with a $754 million loss the previous year. That was in part because of increases in holiday shipping during the first quarter of the fiscal year, which begins in October.

“Shipping and package revenue grew 13.5 percent over the same period last year, and was particularly strong during the holiday shipping season,” Postmaster General and Chief Executive Officer Megan Brennan said. “We projected and delivered more than a 16 percent increase in package volume.”

The first-quarter operating revenue for the Postal Service was $19.3 billion, an increase of $613 million, or 3.3 percent, over the same period in the previous year.

For the first time since 2004, drivers are expected to pay an average of less than $2 per gallon for gasoline, the government said Tuesday.

They can thank the huge glut of oil around the globe.

The Energy Information Administration said in its monthly short-term energy outlook that regular gasoline will average $1.98 per gallon nationwide in 2016. The last time oil averaged less than $2 for a full year was 2004, which was also the last time gasoline at stations in some states fell below $1 a gallon.

The pump savings are a direct result of the 70 percent collapse in crude oil prices since mid-2014. The International Energy Agency said the supply of oil is set to outpace demand again this year, keeping a lid on any expected price increases. Global supplies could exceed demand by as much as 2 million barrels a day in the first quarter, the agency said.

“If these numbers prove to be accurate, and with the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term,” the agency said.

It expects benchmark U.S. crude to average $37.59 per barrel this year, down from $48.67 last year. International crude will average $37.52, down from $52.32 per barrel in 2015, according to the agency.

The average round-trip U.S. airfare was $372 in the third quarter, the cheapest price for a ticket since 2010, the federal government said Tuesday.

The price was down 6.2 percent from the same period in 2014, according to the Transportation Department’s Bureau of Transportation Statistics.

Airlines have been passing along some of their fuel cost savings to consumers, and competition among airlines has also heated up as ultra low-cost carriers like Frontier and Spirit, which offer cheap seats with no amenities, give American, Delta and United a run for their money.

Third-quarter fares were down 3.5 percent from the second quarter of 2015. The numbers are adjusted for inflation.

Sears keeps pruning its business in a years-long makeover, a bid to transform itself from a 123-year-old retail store into a nimble, 21st century operator.

Patience appears to be wearing thin. Shares slid Tuesday after the company said it would accelerate the closure of some of its stores following a “challenging” holiday season. The stock fell 9 percent Tuesday to close at $15.25.

Comparable-store sales in the fourth quarter dropped 6.9 percent at Sears, and 7.2 percent at Kmart, which the also company owns. That’s a key indicator of a retailer’s health because it excludes the volatility from stores recently opened or closed.

While the quarter that contains the critical shopping season was better than the previous three quarters, overall same-store sales fell 9.2 percent in 2015, with Sears stores leading the decline.

“The holiday selling season proved to be challenging, with historically warm weather and intense competition pressuring margins and driving comparable store-sales declines,” the company said Tuesday.

Sears said the closures will include, but not be limited to, about 50 stores that it recently announced would be shuttered in the next few months.

The retailer will release quarterly and full-year financial results on Feb. 25.

Optimism about the economy by small-business owners slipped last month to a nearly two-year low as concerns about slowing growth led to projections for fewer sales, according to survey results released Tuesday.

The monthly optimism index from the National Federation of Independent Business declined by 1.3 points to 93.9.

The figure is well below the index’s 42-year average of 98 and indicates that small-business owners are wary of future conditions, the group said.

“Most of the decline was accounted for by expected business conditions in the next six months and the expected real sales,” said William Dunkelberg, the group’s chief economist.

Survey results on business spending and hiring held fairly steady, he said.

A former business titan convicted in a notorious corporate fraud case is now board chairman of a nonprofit that helps ex-prisoners.

The Fortune Society said Tuesday that ex-Tyco International CEO Dennis Kozlowski was elected to the post. The group helps about 4,500 ex-prisoners re-enter society every year.

Kozlowski and another Tyco executive were convicted in 2005 of looting the security systems company of $600 million.

The trial featured tales of lavish spending, including a $6,000 shower curtain and a $2 million toga party on the Italian island of Sardinia in 2001 — complete with an ice sculpture of Michelangelo’s “David” urinating vodka.

Chronicle News Services