HP Posts Horrific Guidance, Will Take $8.8B USD Hit on "Improprieties"
November 20, 2012 9:27 AM
comment(s) - last by
(Source: titanic means something personal to everyone )
Léo Apotheker's legacy continues to haunt troubled PC maker
It's been a hard fall from grace for troubled personal computer giant Hewlett-Packard Comp. (
). After the board booted successful CEO Mark Hurd for an
illicit office affair
marketing contractor-cum-ex-adult film star
, it made the disastrous decision to hire Léo Apotheker, an executive with a troubled past and little experience in the America market.
I. Léo Apotheker: The Disaster That Keeps on Giving
current CEO Meg Whitman
(formerly CEO of eBay, Inc. (
) during its formative years)
tries to right the ship with record layoffs
, HP has shaken investor confidence with a dire Q1 earnings
, a forecast that once more dredges up the ugly legacy of Mr. Apotheker.
Mr. Apotheker came to HP shortly after being essentially fired from German enterprise software giant SAP AG (
). He was fired after only a year as CEO on allegations that he turned a blind eye to software theft, was belligerent to trade unions, and generally mismanaged the company's finances.
Nonetheless, HP -- perhaps eyeing Mr. Apotheker's more successful years at SAP before his ascent to its top post -- took the plunge, recruiting the ousted German CEO,
setting aside the large culture gap and his poor track record
. The board then watched idly as Mr. Apotheker made plans to
spin off HP's core consumer PC business
and acquire UK software giant Autonomy Corp. plc.
for $10.3B USD in 2011
. Mr. Apotheker also triggered HP's exit from the mobile device market,
shuttering the product line
of the recently acquired Palm unit.
Meg Whitman has been unable to salvage HP's bottom line, thus far.
[Image Source: Fortune MPW]
Those decisions led one former board chairman to suggest HP was
trying to "commit corporate suicide"
led to a lawsuit
from outraged shareholders. The criticism eventually moved the sluggish board to react; Mr. Apotheker was outed from the CEO spot at a major tech company for the
second time in two years
II. A $8.8B Hit on "Improprieties"
But his legacy lives on.
In its earnings guidance HP announced that it expects to take a massive $8.8B USD write-down due to "accounting improprieties". The guidance reads:
The charge relates to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy that occurred prior to HP's acquisition of Autonomy and the trading value of HP stock during the period preceding the recording of the charge. In the third quarter of fiscal 2012, HP recorded an impairment charge for the goodwill associated with its Services segment following an impairment review driven by, among other things, the trading value of HP stock during the period preceding the recording of the charge, market conditions and business trends within that segment.
Analysts had been expecting around $0.87 USD/share earnings. With the massive write-down, EPS are expected to dip to between $0.68 and $0.71 USD/share.
This Autonomy poster seems rather ironic in retrospect, considering the software company is alleged to have duped HP out of billions via bad accounting. [Image Source: Autonomy]
As the company approaches its fiscal Q1 2013, the holidays bring little joy to HP. The company looks set to lose its top spot to the Hong Kong-based Lenovo Group, Ltd. (
). Gartner Inc.'s (
) numbers indicated that
Lenovo already passed HP last quarter
, although the other major reporting agency, the IDC Group
HP clung to a narrow lead. Given the trends, though, it is expected Lenovo will be well ahead of HP in unit sales for calendar Q4 2012 (fiscal Q1 2013 for HP).
HP shares have plunged 10 percent in pre-market trading. Analysts were already pessimistic, as the
previous earnings guidance
was consider weak. If that one was consider weak, though, this one can only be regarded as an utter disaster for the Palo Alto-based hardware veteran.
HP on MarketWire
This article is over a month old, voting and posting comments is disabled
RE: HP KNEW what they were getting....
11/20/2012 2:53:55 PM
Hurd correctly foresaw the future of computing as being in the mobile space but was ousted before he could fully realise that vision. Apothekar starved Palm of support, then shut it down after it failed instead of investing in it. At the time I always thought the Autonomy was overvalued, glad to have been proven right. It's a shame a fraction of that money wasn't used to fix webOS and Palm. HP are now paying for that in more ways than one, shrinking PC market and reliance on a hardware competitor (M$) for operating software.
"The Space Elevator will be built about 50 years after everyone stops laughing" -- Sir Arthur C. Clarke
Gartner: Lenovo Grabs the Top Spot in Global PC Market from HP
October 11, 2012, 9:12 AM
HP Earnings Outlook Clouds, Stock Price Declines
October 4, 2012, 8:37 AM
HP Increases Job Cut Forecasts to 29,000
September 11, 2012, 2:40 AM
HP CEO Apotheker Fired, Meg Whitman Tapped as His Replacement
September 22, 2011, 4:17 PM
Report: HP Ponders Firing New CEO, Just a Year After His Firing From SAP
September 21, 2011, 3:09 PM
"Prepare to be Punished": Microsoft is Killing OneDrive With Cuts, Blames Users
November 3, 2015, 8:23 PM
Apple's New "Magic" Peripheral Line Packs High Tech, High Prices
October 13, 2015, 9:39 PM
Samsung Adds 2 TB 850 EVO, PRO SSDs for $800, $1000
July 7, 2015, 4:23 PM
Seagate Senior Researcher: Heat Can Kill Data on Stored SSDs
May 13, 2015, 2:49 PM
How to Recover Most Apps After Your NVIDIA Driver Crashes in Windows 10
March 30, 2015, 12:54 PM
Tinkerer Gets Old School Mac Plus Running on the Modern Web
March 24, 2015, 6:41 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information