HP takes $8.8 billion charge ‘linked to serious accounting improprieties’ at Autonomy; PC and print sales slide
These are not good days at Hewlett Packard (HP). Today the company announced its Q4 earnings, and while the financial papers will most likely focus on a comparison of the company’s performance versus predictions from beanie wearing analysts, the fact is that the company is seeing revenue decline.
HP reported that revenue fell to $30.0B from $32.1B one year ago, and that for the year revenue was down 5 percent.
Earnings were seriously impacted by a massive write-down of $8.8 billion associated with its acquisition of the UK software firm Automony, an acquisition under taken by former CEO Léo Apotheker.
“The majority of this impairment charge,” HP said in its earnings announcement, “is linked to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation plc that occurred prior to HP’s acquisition of Autonomy and the associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term.”
HP’s core businesses of PCs and printing were down significantly in the quarter, with PC sales down 14 percent, total units down 12 percent, consumer printer hardware down 22 percent.
But HP is demonstrating that M&A and good due diligence is fast becoming a lost art, and that PC makers will continue to struggle in an era of mobile and tablets.