H-P Lowers First-Quarter Earnings

H-P revised its first-quarter results, lowering its earnings as a result of long-standing EDS litigation.
Author:
Publish date:

Updated with H-P comment.

PALO ALTO, Calif. (

TheStreet

) --

Hewlett-Packard

(HPQ) - Get Report

has revised its recent

first-quarter results

, lowering its earnings to 93 cents a share as a result of long-standing litigation related to its EDS division.

Earlier this week a British court ordered EDS to make an interim payment of 70 million pounds, or around $112 million, to British Sky Broadcasting (BSkyB) in a court case dating back to 2004. The case relates to a customer relationship management project that BSkyB awarded to EDS in 2000.

The court's order on March 1 followed an earlier decision in January that dismissed most of BSkyB's claims against EDS but found the company liable in certain areas.

"The revisions reflect an increase in the amount of the contingency reserve previously established in connection with the litigation," said H-P, in a statement released after market close on Friday.

The tech bellwether had already made an interim payment of 200 million pounds, or approximately $320 million, in February, but is seeking permission to appeal the March 1 ruling, according to the statement.

In an email to

TheStreet

, H-P explained that it inherited the legal dispute when it bought EDS almost two years ago. "The revision is unrelated to HP's strong business performance in the first quarter," it added.

H-P, which bought EDS for $13.9 billion in 2008, has lowered its first-quarter income by around $73 million, or 3 cents a share. As a result, the company has brought first-quarter net income of $2.25 billion and earnings of 93 cents a share, down from $2.32 billion and 96 cents a share.

Excluding items, the tech bellwether revised its net income to $2.59 billion and earnings to $1.07 cents a share. Previously, H-P had brought in net income of $2.67 billion and earnings of $1.10.

H-P did not provide any updated guidance for its second quarter or fiscal 2010. The company's shares dipped 17 cents, or 0.33%, to $51.86 in extended trading.

-- Reported by James Rogers in New York

RELATED STORIES

>>H-P, on Deck, Is a Buy

>>Emulex Climbs on IBM, H-P Deals

>>Cisco, H-P Gear Up for All-Out War

Follow James Rogers on

Twitter

and become a fan of

TheStreet.com

on

Facebook.