We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
80,259 News Articles

HP takes $8.8 billion charge on Autonomy accounting improprieties

Posts $6.9 billion loss for fourth quarter

Hewlett-Packard is taking an $8.8 billion charge as a result of what it called serious accounting improprieties that occurred at U.K. software company Autonomy before it acquired the firm in 2011.

Taking the charge into account, HP suffered a $6.9 billion loss in the fourth quarter. HP CEO Meg Whitman said on a conference call Tuesday that Autonomy misled HP about the state of its business before the acquisition. HP has notified authorities and will help criminal investigations, Whitman said.

HP bought Autonomy for its enterprise search engine technology, among other things.

  • The majority of the impairment charge resulting from the Autonomy acquisition was "linked to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation plc that occurred prior to HP's acquisition of Autonomy," Whitman said on the conference call.
  • "These improprieties were discovered through an internal investigation after a senior member of the Autonomy leadership team came forward following the departure of (former Autonomy CEO Mike Lynch) on May 23rd," Whitman said.
  • "Based on this information HP initiated an intense internal investigation including a third-party forensic review of Autonomy's historical financial results. HP has contacted the SEC's enforcement division and the U.K. Serious Fraud Office. We have requested that both agencies open civil and criminal investigations into this matter," Whitman said, adding that "HP intends to seek redress against various parties in the appropriate civil courts."

For the fourth quarter, HP's net revenue dropped 7 percent to $30 billion as the company's PC market share declined and printer sales dropped. Analysts had expected the company to generate $30.43 billion in sales, according to a Thomson Reuters poll.

  • Several major HP business areas suffered a decline in the fourth quarter. Services revenue dropped 6 percent year over year. Enterprise servers, storage and networking revenue declined 9 percent year over year.
  • One bright spot was software revenue, which increased 14 percent year over year with a solid 27.2 percent operating margin. Networking revenue was up, by 7 percent.
  • HP shares dropped 11 percent to $11.84 in premarket trading Tuesday morning.

IDG UK Sites

Windows 9 release date, price, features: Windows 9 beta leaked ahead of 30 September unveiling

IDG UK Sites

Is Apple losing confidence in itself?

IDG UK Sites

The Samsung Gear VR is better than the Oculus Rift (kinda)

IDG UK Sites

How (and where) to buy an iPhone 6 or iPhone 6 Plus in the UK. Plus: How to buy an iPhone 6 today