HP OZ A Basket Case, Propped Up By US AS Sales Slump

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Fined millions last year by the Australian Competition & Consumer Commission for misleading customers about warranty rights Hewlett Packard has reported a massive slump sales as consumers turn off buying the Companies PC products.

The US Companies Australian subsidiary which is being propped up by their parent Company has reported a wider net loss to A$270 million for the 12 months to October 31 2013, they have also reported a 10 percent decline in product sales.

The PC Company who has also struggled to compete in the tablet and smartphone market and last year flogged their Web OS software to LG Electronics after several disastrous attempts at trying to get consumers to buy HP made Web OS products is struggling to compete on several fronts including in their printer division.  

Total revenue for H-P’s financial year -which ended on October 31 – fell marginally from $3.5 billion in 2012 to $3.3 billion. 

But operating loss before tax was $104 million, compared to a $58 million pre-tax loss reported in the previous year. Net profit after tax was not stated in the report we saw.

H-P Australia, which has 5400 staff, has spent the last 12 months reducing costs in an effort to slim down their Australian operation as more losses are tipped as consumers move away from buying HP PC products in favour of tablets and smartphones from other vendors such as Samsung, Apple and LG. 

According to its filing, the company’s liabilities exceeded its assets at October 2013 to the tune of $424 million.

According to HP management the local operation relies significantly on the financial support of its US parent.

“The board of directors has concluded that the consolidated entity [HP Australia] is a going concern as its ultimate holding company, Hewlett-Packard Company, has undertaken to provide financial support to the consolidated entity [HP Australia] so that it can meet its obligations and liabilities as and when they fall due for at least 12 months from the date of signing these financial documents.”

ITNews reported that HP’s US parent company posted full-year net profit of US$5.1 billion (A$5.56 billion), turning around a US$12.7 billion loss incurred in the previous fiscal year. The company’s global revenue was down seven percent to US$12.3 billion.
HP Australia hired a new managing director in the last six months, after the departure of the local operation’s MD and enterprise services boss.

Both were replaced by HP’s former UK and Ireland vice president Nick Wilson, who emigrated down under to the role of managing director for HP South Pacific.
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