HP takes $US8.8 billion charge on Autonomy accounting improprieties

Posts $US6.9 billion loss for fourth quarter

Hewlett-Packard is taking an $US8.8 billion charge as a result of what it called serious accounting improprieties that occurred at UK software company, Autonomy, before it acquired the firm in 2011.

Taking the charge into account, HP suffered a $US6.9 billion loss in the fourth quarter. HP CEO, Meg Whitman, said 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 per cent to $US30 billion as the company's PC market share declined and printer sales dropped. Analysts had expected the company to generate $US30.43 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 per cent year over year. Enterprise servers, storage and networking revenue declined 9 per cent year over year.
  • One bright spot was software revenue, which increased 14 per cent year over year with a solid 27.2 per cent operating margin. Networking revenue was up, by 7 per cent.

2015 State of The IT Channel Survey : IT'S TIME!!! Fill in this year's State of the IT Channel Survey and be in the running to win great prizes. CLICK HERE

Join the ARN newsletter!

Error: Please check your email address.

Tags business issuesHewett-Packardfinancial results

More about AutonomyAutonomyHewlett-Packard AustraliaHPReuters AustraliaSECThomson

ARN Directory | Distributors relevant to this article

ARN Directory | Vendors relevant to this article

Show Comments
 

Latest News

Apr 17
NetApp secures $2m supercomputing deal with NCI
Apr 17
Mandatory Disclosure Laws needed to counter lax security attitudes: Symantec
Apr 17
Alcatel-Lucent Enterprise gears for growth following China Huaxin takeover
Apr 17
Vocus buys $15 million stake in Macquarie Telecom
More News
21 Apr
APJ Progress Spark Conference
22 Apr
2015 Innotribe Startup Challenge
27 Apr
Disruptocon
27 Apr
Disruptocon
View all events