HP reported a net loss of USD 6.9 billion for its fiscal fourth quarter to October, hurt by restructuring charges and asset writedowns. Impairments at the software business Autonomy were responsible for USD 8.8 billion in charges. HP said the charges were due to "serious accounting improprieties, disclosure failures and outright misrepresentations" at Autonomy prior to its acquisition by HP last year.
Excluding the one-time items, HP reported EPS down just 1 percent from a year earlier to USD 1.16. Revenues fell 7 percent to USD 30.0 billion, as growth in the software market was unable to offset the slowdown in the PC and server markets. After operating cash flow of USD 4.1 billion in the quarter, HP still had total cash of USD 11.8 billion at the end of the period.
The company forecast adjusted EPS of USD 0.68-0.71 in fiscal Q1; this excludes estimated one-time costs of 34 cents a share for amortization of intangible assets, restructuring and acquisition-related charges. HP forecast full-year EPS at USD 2.10-2.30, in line with its earlier outlook. Adjusted EPS is estimated at USD 3.40-3.60 this year, down from USD 4.05 last year.
HP said it conducted its own investigation of the accounting problems at Autonomy after a former board member of Autonomy came forward alleging questionable accounting practices prior to the HP takeover. HP's own internal investigation has found evidence of this and continues with a forensic review by PwC. The company has also turned to the SEC and UK Serious Fraud Office to investigate and said it will start a civil lawsuit in an attempt to recover some of the loss to shareholders. HP said it remain committed to continuing with the Autonomy business.
