Beleaguered HP takes $8.8 billion writedown on Autonomy; forecasts profit miss on slumping Windows PC sales

“Hewlett-Packard Co. took an $8.8 billion charge citing ‘a willful effort to mislead investors and potential buyers’ at Autonomy Corp., the software company it agreed to purchase last year for $10.3 billion,” Aaron Ricadela reports for Bloomberg.

“More than $5 billion of the total charge is due to accounting practices, which were disclosed by a senior executive at Autonomy after founder Mike Lynch departed, Hewlett-Packard said. Autonomy’s U.K. spokesman George Lockett didn’t have an immediate comment,” Ricadela reports. “Former Hewlett-Packard Chief Executive Officer Leo Apotheker agreed to buy Autonomy, the second-largest U.K. software maker, to expand in cloud-computing and add software that searches a broad range of data, including e-mails, music, videos and posts on social networks such as Facebook Inc.”

Ricadela reports, “The shares of Hewlett-Packard fell as much as 12 percent in early trading… [HP] is down 48 percent this year. Also today, Hewlett-Packard forecast fiscal first-quarter profit that missed analysts’ estimates amid a continuing slump in personal computer sales. Earnings excluding some items will be 68 cents to 71 cents a share for the period, which ends in January, Hewlett-Packard said in a separate statement. Analysts on average had estimated profit of 85 cents a share, according to data compiled by Bloomberg… The earnings report came less than a week after Dell Inc. reported fiscal third-quarter revenue fell 11 percent and PC sales dropped 19 percent, amid competition from Apple Inc.’s iPad…”

Read more in the full article here.

MacDailyNews Take: It’s like a Laurel & Hardy movie: Meg keeps trying to “turnaround,” but the steering wheel keeps coming off in her hands. Meanwhile, Apple long ago moved to flight, so Meg’s road is a dead end.

Related article:
Apple is killing Dell and Hewlett-Packard – August 6, 2012

14 Comments

  1. Why do HP, Dell and many technology companies fall flat on their faces? They were supposed to lead American technology parade but unfortunately they were big disappointments. The reason? It’s Microsoft’s, Google’s and Amazon’s business model that dumb down American competitiveness. Microsoft provides cheap fishes to these companies instead of teaching them how to fish. All these companies have to do is to use Microsoft software at cheap rate and they do not have do do any R&D. In the short term this strategy worked but in the long term as more and more companies used this route, the advantages cancelled out. Throughout the decades American have been suckered to believe that cheap, cheap, cheap is good. The airlines trumpeted the “fly first, pay later” mantra; the banks provided easy money on credit; Microsoft, Google, Amazon provides the means for companies to race to the bottom. Early birds to such utopias were the first to benefit but as more and more entrants chased the gravy train, the whole scheme collapsed. America is finding this lesson too late to reverse the rot.

    1. The situation is very different when people can observe and think critically for themselves. Empowered people are a threat to those who thrive on usurping personal power from others.

      It’s not just America, it’s world wide. As the natural instinctive connective values of children is replaced by arbitrary rules and regulations modern day adult zombies are formed.

      America will never reverse the rot on it’s own.

    1. You’re new here, aren’t you?

      “Beleaguered” is the Apple community’s way of repaying all those who loved calling Apple “beleaguered” when they were in trouble, especially in the late 1990s, and when the first iMac and iPod were introduced. The favor is being returned ten fold.

      If you’re going to hang around here, get used to it.

      1. I understand the origin of using “beleaguered.” But it’s gotten so repetitive on this site.

        Also, Apple was beleaguered at one time. Thank goodness they aren’t now.

  2. What kills me about this news, as well as other in the “PC” business, is that if Apple missed estimates as bad as any of these companies have then the stock would drop off a cliff.
    Why can’t these analysis figure out that Apple is not playing the same game as the PC vendors and if the PC industry is suffering then Apple is reaping the rewards. Today Apple is being dragged down because of more bad news to the PC industry. When will they learn that bad news for them is very good news for Apple and their post-PC position.

  3. “The earnings report came less than a week after Dell Inc. reported fiscal third-quarter revenue fell 11 percent and PC sales dropped 19 percent, amid competition from Apple Inc.’s iPad…”

    So from this (as is the norm) Apple stock is down today too.

    I don’t get it. Why would the stock of your competitor go down when your sales are down because of said competitor? Someone please explain. Why isn’t AAPL flying up on this news?

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.