The OEM saw significant losses skewed by the recent revelations pertaining to Autonomy.
CBS News reported that HP’s results were, according to the OEM, largely due to “disclosure failures and outright misrepresentations at Autonomy Corporation”, with whom it is currently beginning a legal battle in the USA over fraudulent accounting.
Quarterly revenue, which came in at $30 billion (€23.32 billion), was down seven percent from 2011, whilst annual revenue of $120.4 billion (€93.6 billion) was down five percent. To add to the $8.8 billion (€6.84 billion) quoted in the Autonomy issue, HP wrote down the goodwill from its acquisition four years ago of EDS, which CBS News noted was a statement of “wast[ing] $16 billion (€12.44 billion) in two major acquistions”.
This major loss is apparently “hitting investor confidence” with stock pricing hitting a 10-year low point last Friday, and the news outlet noting in turn that every area of HP’s business “has significant cracks that badly damaged the business”. PC purchasing is falling with the growth in smartphones and tablets, whilst server infrastructure is usurped by cloud networking and, most aptly, printing is becoming less and less popular amongst consumers and businesses alike.
CBS’ consensus is that former CEO Leo Apotheker’s suggestion to ditch HP’s PC division would have been a good idea, though it would have come at the cost of “significant infrastructure and low margins”, and the news outlet added that “even if HP can boost its services businesses, the company may eventually have to concede that it has a future only as a much smaller concern”.
Readwrite.com also noted that the Autonomy situation has the potential to “break HP’s back”, as in the next six months the OEM “has to convince investors its PC, printer and technology-services business can generate the cash needed to build and sell products into growth markets”. The site added that whilst CEO Meg Whitman is attempting to fix Apotheker and Mark Hurd’s damage, she’s “being paid millions to clean up the mess” and “so far, for every step forward, the company has taken two steps back”.
The site’s view on Autonomy’s damage to HP is that it makes everyone wonder “how many more giant blunders are on the way”, with the excuse that Autonomy was responsible for not hiding the fact that HP execs were “hoodwinked”, and that blaming others “won’t ease the doubts about the competency of HP execs and its board”.
Crawford Del Prete, IDC Analyst, noted to the site: “If they can’t do that (increase sales), then there’s going to be massive pressure for them to split the company up. Otherwise, the perception would be they’re just going to atrophy. Those assets are going to become less and less and less valuable.”
However, Del Prete added that “there’s many product lines that Hewlett-Packard has that are world-class competitive and other product lines that can be world-class competitive”, and the site notes that job cuts announced by the OEM could help repair the damage.