Fedex Corp: It's All in the Name

| About: FedEx Corporation (FDX)

If you want to know how to admit that you overpaid for an acquisition four years ago, and do so elegantly, just read this MarketWatch article:

SAN FRANCISCO (MarketWatch) -- FedEx Corporation said after the close of regular trading Monday that it will record a charge of about $891 million to change the name of FedEx Kinko's stores to FedEx Office.

The company called it a "strategic decision" to strike Kinko's from the retail chain's name, and the charge is broken down into a $515 million charge for the use of the trade name, $367 million in goodwill and $9 million in other expenses.

So it actually costs $9 million to change the name. The remaining $367M is a non cash write down related to the purchase price. The $515M is lord knows what, could be just hiding accumulated loses. In any event, we will have to see next quarter's numbers and try and figure out if the $515M really is a one time loss or is related to the high price of fuel. The CrossProfit e-line has been updated accordingly.

Disclosure: No conflicts