“Facing up to its past mistakes is expected to saddle Hewlett-Packard Co. with a quarterly loss of nearly $9 billion, the largest setback in the Silicon Valley pioneer’s history,” Michael Liedtke reports for The Associated Press.
“The sobering results, due out after the stock market closes Wednesday, won’t be a surprise. The company, which is based in Palo Alto, Calif., telegraphed the loss earlier this month when it disclosed it will absorb massive charges to account for an ill-advised acquisition and the initial costs of a streamlining program that will jettison 27,000 jobs to help boost HP’s sagging profits,” Liedtke reports. “Most of the damage stems from HP’s $13 billion acquisition of technology consulting service Electronic Data Systems in 2008. The deal hasn’t panned out the way that HP envisioned, forcing the company to write down the value of its Enterprise Services division.”
Liedtke reports, “Investors aren’t likely to dwell on the loss because they are focusing on HP CEO Meg Whitman’s plans to turn around the company. After nearly a year on the job, Whitman still hasn’t been able to convince Wall Street she has come up with the right formula. HP’s stock has fallen by about 14 percent under Whitman’s leadership so far. Meanwhile, the bellwether Dow Jones industrial average that includes HP as a component has climbed by 23 percent during the same period… Like other personal computer makers, HP is having trouble selling more machines as more consumers and businesses embrace tablet computers such as Apple Inc.’s iPad.”
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