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HP continues financial struggles with $8.9bn quarterly loss

EDS write-off to blame
Thu Aug 23 2012, 09:16
An HP logo

MAKER OF EXPENSIVE PRINTER INK HP has posted another woeful financial quarter, reporting an $8.9bn loss. 

The company on Wednesday posted a five percent drop in revenues and a nine percent drop in earnings per share. HP reported that revenues on the quarter were $29.7bn, while net earnings weighed in at $2bn on the quarter.

HP's whopping $8.9bn loss was largely due to the company's $13.9bn purchase of Electronic Data Systems (EDS), which the company had to write off.

CEO Meg Whitman said that the sagging financial returns were, besides the write-off, due to a combination of economical and industry downturns as well as what Whitman described as poor "execution" by the company of its plans and goals.

One of the biggest losses for HP was in PCs. The company estimated that PC revenues were down by some 10 per cent over the same period last year. The drop in sales was similar to those posted by rival Dell.

"The reality is were locked in serious competition battles," said Whitman, "but we are determined to win."

Whitman said that the company was planning a number of new devices, including dedicated PCs and tablets as well as hybrid notebook and tablet systems, to coincide with Microsoft's upcoming Windows 8 release.

The company is also looking to continue with a planned overhaul for its Enterprise Services division. Earlier this month the company announced that it would be restructuring its leadership for the division and taking an $8bn goodwill cut.

"Enterprise Services is in a multi-year turnaround and progress will not be linear," Whitman warned analysts.

"We will turn Enterprise Services around, but it will take some time." µ

 

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