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FedEx is taking a $1.2 billion hit against its fiscal fourth quarter earnings. These charges also include its purchased Kinko's and Watkins Motor Freight businesses.
The under performing Kinko's was purchased in 2004, and was renamed to FedEx Office. FedEx said in a securities filing that it expects to take a $810 million charge against Kinko's.
Also, FedEx expects to take a $80 million hit for the reduced goodwill for Watkins. Watkins is a LTL (less than a truckload) carrier. They bought Watkins in 2006, hoping to beef up its trucking operations.
Furthermore, these charges, along with around $300 million in already disclosed charges, will be included in FedEx's fiscal fourth quarter financial results.
The front-runner to the goodwill impairment was FedEx Office and FedEx National LTL's weak performance from terrible economic conditions.
FedEx is joining the several other trucking companies where their acquisitions made in recent years are deteriorating from the downturn, that has dwindled away at shipping business.
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Thursday, June 11, 2009
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