FDX quarter hit this stock but note more planes being put in service . AirT is the feeder for Latin America and Parts of the USA and mothballed afew too . Get ready for growth again late this year and next perhaps ?
During the call, CFO Alan Graf said the company faces cost headwinds, primarily a fixed pension cost increase of $260 million due to the decline in the discount rate. "I doubt any of you had that much of an increase in projections," Graf told analysts. He said he is lobbying for change in the requirement that pension fund levels be maintained at "mark to market" levels based on the discount rate.
This is the lowest rate we'll ever see," Graf said. "That was a big factor in why our range may be a little bit lower than where First Call is."
Additionally, FedEx faces increased maintenance costs on planes returning to service as the economy expands. Bronczek said six were returned in the fourth quarter and more will be coming in the first two quarters of fiscal 2011, as the company grows capacity to meet demand.
Later, Graf asked, "What's wrong with a 20% to 25% improvement in EPS for the coming year?"