Hewlett-Packard (HPQ) Gets Shellacked as $8.8B Fraud Spoils Q4
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Price: $27.70 -0.4%
Revenue Growth %: -2.4%
Financial Fact:
Net earnings: 783M
Today's EPS Names:
SFST, VLTO, CLIR, More
Revenue Growth %: -2.4%
Financial Fact:
Net earnings: 783M
Today's EPS Names:
SFST, VLTO, CLIR, More
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Hewlett-Packard (NYSE: HPQ) investors were stunned on Tuesday after Meg Whitman and Co. reported fourth-quarter results. While EPS topped estimates, Hewlett-Packard reported an $8.8 billion impairment charge related to accounting fraud within its Autonomy business, causing jeers on Wall Street.
Commenting on the impairment charge, Hewlett-Packard said:
"HP recorded a non-cash charge for the impairment of goodwill and intangible assets within its Software segment of approximately $8.8 billion in the fourth quarter of its 2012 fiscal year. The majority of this impairment charge is linked to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation plc that occurred prior to HP's acquisition of Autonomy and the associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term. The balance of the impairment charge is linked to the recent trading value of HP stock. There will be no cash impact associated with the impairment charge."
Autonomy was acquired in 2011 under former CEO Leo Apotheker's watch.
Impairment charge aside, HP revenue in fourth-quarter came in at $30.0 billion, just short of estimates of $30.4 billion, and 7 percent below comparable revenue in 2011. Revenue declined in personal system, printing, services, and ESSN, while software and financial series revenue posted gains.
At $1.16, fourth-quarter EPS topped estimates by 2 cents.
Looking forward, HPQ sees first-quarter 2013 EPS of 68 cents to 71 cents, below consensus estimates of 85 cents.
For the full year fiscal 2013, HP estimates a non-GAAP diluted EPS to be in the range of $3.40 to $3.60 and GAAP diluted EPS to be in the range of $2.10 to $2.30, in-line with HP's previously communicated outlook.
Commenting on the impairment charge, Hewlett-Packard said:
"HP recorded a non-cash charge for the impairment of goodwill and intangible assets within its Software segment of approximately $8.8 billion in the fourth quarter of its 2012 fiscal year. The majority of this impairment charge is linked to serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation plc that occurred prior to HP's acquisition of Autonomy and the associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term. The balance of the impairment charge is linked to the recent trading value of HP stock. There will be no cash impact associated with the impairment charge."
Autonomy was acquired in 2011 under former CEO Leo Apotheker's watch.
Impairment charge aside, HP revenue in fourth-quarter came in at $30.0 billion, just short of estimates of $30.4 billion, and 7 percent below comparable revenue in 2011. Revenue declined in personal system, printing, services, and ESSN, while software and financial series revenue posted gains.
At $1.16, fourth-quarter EPS topped estimates by 2 cents.
Looking forward, HPQ sees first-quarter 2013 EPS of 68 cents to 71 cents, below consensus estimates of 85 cents.
For the full year fiscal 2013, HP estimates a non-GAAP diluted EPS to be in the range of $3.40 to $3.60 and GAAP diluted EPS to be in the range of $2.10 to $2.30, in-line with HP's previously communicated outlook.
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