Hewlett-Packard said Tuesday it is taking an $8.8
billion charge in its latest quarter to align the accounting value of a
British company it acquired for $10 billion last year.
HP says Autonomy, a search engine maker,
lied about its finances, resulting in a massive write-down of the value
of the business. CEO Meg Whitman is avoiding calling it a fraud, but a
company statement says there were "serious accounting improprieties,
disclosure failures and outright misrepresentations at Autonomy."
HP shares sank almost 11%, or $1.45, to $11.85 per share in premarket trading.
net loss for the fiscal fourth quarter, which ended Oct. 31, amounted
to $6.85 billion, or $3.49 per share. That compares with net income of
$239 million, or 12 cents per share, in the same period last year.
was the second mammoth loss in a row for HP. In the third fiscal
quarter, it lost a record $8.86 billion, or $4.49 per share. That was
due to a charge for another acquisition - that of Electronic Data
Systems, a technology consulting service that it bought for $13 billion
in 2009. In that case, HP didn't blame improper accounting, just results
that didn't live up to expectations.
Excluding the charges in the
latest quarter, HP earned $1.16 per share in the latest quarter, just
above the average analyst forecast of $1.14 per share, as polled by
HP's revenue was $30.0 billion, down 7% from last year. That was below analyst expectations at $30.5 billion.
Monday, HP shares had surged more than 3% in advance of its scheduled
fourth-quarter earnings report, raising questions about what might be
afoot at the stumbling PC maker.
Rival Dell on Thursday
disappointed Wall Street, reporting a 19% year-on-year decline in
personal computer revenue. Dell's earnings disappointment was a
harbinger of bad news for HP, analysts say.
HP installed former
eBay CEO and California gubernatorial candidate Meg Whitman as chief
executive in September. The move came after a disastrous 10-month stint
by former CEO Leo Apotheker.
In August, Apotheker stunned the
industry with a proposal to spin off or sell the PC unit, which
accounted for more than $40 billion in revenue and $2 billion in
operating profit last year. Whitman quickly reversed course on the move
to jettison the personal computer business, but the uncertainty had
already done damage to its business.
PC giant HP's stature as worldwide personal computer leader was toppled last month by Lenovo, according to researcher Gartner.
Contributing: Scott Martin in San Francisco