Multi-Billion Hewlett-Packard Loss is Sign of the Times
September 8, 2012
I can across some surprising news today while browsing The Inquirer about a worrying financial situation for Hewlett-Packard. In the article, “HP’s EDS Write-Off Hides Deeper Problems,” we learn that apparently servers, networking, and even ink sales are down. But the $8.9 billion third quarter loss is mostly attributed to the write-off of its purchase of Electronic Data Systems from General Motors in 2008.
The article informs us about the company’s situation:
“For HP, the only ray of light was its software business, to which [former CEO] Apotheker added the British based Autonomy. Given that many thought that HP had overpaid for Autonomy when it shelled out over $10bn last year for a company that barely makes $250m in profit a year, there could well be another write-down in the future unless HP does a better job of integrating the firm than it did with EDS.”
All but one of HP’s business units saw a decline in revenue, so the focus should likely be on more than just the mismanaged purchase of EDS. We think this serious problem is being masked by multi-billion dollar write-offs. It is apparent that server and PC vendors are all having trouble distinguishing themselves from the cloud crowd, and not even established brands are safe.
Andrea Hayden, September 08, 2012
Sponsored by ArnoldIT.com, developer of Augmentext
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