Just over a year after coughing up $11.7 bn for Autonomy, HP accuses it of having “serious accounting improprieties.”
|HP is blaming this man, Mike Lynch, for its financial woes.|
And some major financial holes.
But HP has further bad news for shareholders this week – an earnings loss of $6.9 billion in Q4 and $12.7bn for full year 2012 (to Oct. 31) – far from a good result from the No 1 (or No. 2 depending on which analyst you believe) PC maker, globally.
FY 2012 revenue fell 5% to $120.4 billion from the prior-year, while Q4 net revenue slumped 7% to $30 bn, it said.
HP announced an $8.8 bn write down of Autonomy assets, the UK owned software company it purchased a year ago in a sink or swim move into software as its hardware business went south.
Autonomy made “serious accounting improprieties, disclosure failures and outright misrepresentations” prior to HP’s takeover of the software firm, the PC giant said in a statement this week.
“Fourth quarter and full year fiscal 2012 results include a non-cash goodwill and intangible asset impairment charge of $8.8 billion relating to the Autonomy business within the Software segment.”
The “misrepresentations” on the expected future financial performance of Autonomy’s business has now cost HP dearly as its latest earnings loss now shows.
The holes in the software company came to light “after a senior member of Autonomy’s leadership team came forward following the departure of founder Mike Lynch” the Palo Alto giant said.
However, former owner of the software company Mike Lynch has “flatly rejected” HP’s allegations, a spokesperson told Reuters.
“The former management team of Autonomy was shocked to see this statement today, and flatly rejects these allegations, which are false.”
Software and HP Financial services were the only two business segments that were up in Q4, with PC, printer and services business all down.
HP’s Personal Systems revenue was down 14% year over year; total units, desktops and notebooks all slumped 12% and revenue from its Printer division fell 5%.
Software revenue grew 14% including its troubled Autonomy business.
However, despite the disappointing results almost right across the business CEO Meg Whitman remains optimistic and insists “progress” is being made.
“Fiscal 2012 was the first year in a multiyear journey to turn HP around,” said Meg Whitman, HP president and CEO
“We’re starting to see progress in key areas, such as new product releases and customer wins. We’re particularly pleased that in Q4, we were able to improve our balance sheet, generating $4.1 billion in operating cash flow, and we returned $384 million to shareholders in the form of share repurchases and dividends.”
Cash flow from operations however rose to $4.1 billion, up 69%.
For the FY 2013, HP estimates a non-GAAP diluted EPS to be $3.40-$3.60 in line with previous forecasts.