HP's purchase of U.K. software maker Autonomy last year was thrust into the spotlight on Tuesday, as the company recorded a massive writedown of around $8.8 billion related to the deal.
HP said most of the asset impairment charge relates to "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy" that occurred prior to HP's $10.3 billion acquisition of the company.
"These improprieties were discovered through an internal investigation after a senior member of Autonomy's management team came forward following the departure of [Autonomy CEO] Mike Lynch in May," said HP CEO Meg Whitman, during the company's earnings conference call on Tuesday.> > Bull or Bear? Vote in Our Poll HP has reported the accounting improprieties to the Securities and Exchange Commission and the U.K's Serious Fraud Office, she added, and also intends to seek redress through the civil courts. "This will take a long time to work through, but we're committed to seeking redress for our shareholders," she said, in response to an analyst's question. "I expect that this will be a multi-year process in the courts of both countries." The No. 1 PC maker beat Wall Street's earnings estimate for the quarter, but missed the consensus top-line forecast. Revenue from HP's Personal Systems Group (PSG) was down 14% year over year, while printing sales slipped 5%. HP's services revenue slipped 6% compared to the equivalent quarter last year, while Enterprise Servers, Storage and Networking (ESSN) was down 9%. Software revenue increased 14% year over year, including the results of Autonomy. HP shares lost 8.6% during the week to close at $12.44 on Friday.
Apple (AAPL) also grabbed its share of attention this week, after the tech giant announced its Black Friday sales event. As part of the promotion, pricing for Apple's iPad with Retina Display started at $458, down from $499. Pricing for the iPad 2 started at $368, down from $399, while pricing for the fourth-generation iPod Touch started at $178, down from $199. Apple announced Black Friday deals on 19 products and accessories. TheStreet's Chris Ciaccia, however, was unmoved by the promotion, citing better deals for Apple products elsewhere, such as at Best Buy (BBY). Apple shares gained 4.5% to end the week at $571.50.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV