Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, June 19, 2009

Article Excerpt

FEDEX CORP., $51.45, New York symbol FDX, fell 3% this week, despite reporting better-than-expected earnings. In the fiscal year ended May 31, 2009, FedEx’s earnings fell 91.3%, to $98 million, or $0.31 a share. The company earned $1.1 billion, or $3.60 a share, in the prior year. The drop was largely caused by a $1.2-billion writedown of goodwill related to its 2004 purchase of Kinko’s Inc. (now called FedEx Office), a chain of stores that sell printing and copying services. Accounting rules force companies to write down goodwill if the underlying assets are no longer worth what the company originally paid for them. So far, FedEx has written off about 70% of the $2.4 billion it paid for Kinko’s. The charge also included a goodwill writedown related to a 2006 purchase of a regional trucking firm. Without these charges, earnings per share fell a more modest 35.5%, to $3.76 from $5.83. Still, that beat the $3.66 a share that analysts were expecting. The…