HP: Autonomy Lied About Their Finances When We Bought Them

Hewlett PackardBy PETER SVENSSON

NEW YORK -- Hewlett-Packard (HPQ) said that a British company it bought for $10 billion last year lied about its finances, resulting in a massive write-down of the value of the business.

HP is avoiding calling it a fraud, but said Tuesday that there were "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy Corporation PLC."

HP is taking an $8.8 billion charge in its latest quarter to align the accounting value of Autonomy with its real value. It said most of that charge was due to the fictional bookkeeping at Autonomy.

The revelation is another blow for HP, which is struggling to reinvent itself as PC sales shrink.

Among other things, Autonomy makes search engines that help companies find vital information stored across computer networks. Acquiring it was part of an attempt by HP to strengthen its portfolio of high-value products and services for corporations and government agencies.

HP shares sank almost 11 percent, or $1.45, to $11.85 per share in premarket trading.

HP's net loss for the fiscal fourth quarter, which ended Oct. 31, amounted to $6.85 billion, or $3.49 per share. That compares with net income of $239 million, or 12 cents per share, in the same period last year.

It was the second mammoth loss in a row for HP. In the third fiscal quarter, it lost a record $8.86 billion, or $4.49 per share. That was due to a charge for another acquisition - that of Electronic Data Systems, a technology consulting service that it bought for $13 billion in 2009. In that case, HP didn't blame improper accounting, just results that didn't live up to expectations.

Excluding the charges in the latest quarter, HP earned $1.16 per share in the latest quarter, just above the average analyst forecast of $1.14 per share, as polled by FactSet.

HP's revenue was $30.0 billion, down 7 percent from last year. That was below analyst expectations at $30.5 billion.

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Well, whenever I spend 10 billion on a company I definitely do a little research first......

November 23 2012 at 6:27 PM Report abuse +2 rate up rate down Reply

Hewlett P are the most fraudulant company. I bought a lap top only a year ago and my pc slowed down so I called tech support and they told me my warrenty was gone and I needed to pay them more monies to update the warrenty, and when I refused they gave me another option, before telling me what I needed to do to fix the problem, I was to give them $99.00 to fix the problem. If not then give them $109.00 per month for tech support. May they fall hard and never recover. I will never buy another product from HP, ever!

November 21 2012 at 9:28 AM Report abuse -1 rate up rate down Reply

Replace Meg with Mitt Romney. Or, Jack Welch. Or, Donald Trump.

November 21 2012 at 7:39 AM Report abuse rate up rate down Reply
1 reply to mornewz's comment


November 21 2012 at 9:54 AM Report abuse rate up rate down Reply

well well they got what they deserved.............learnt my lesson we will never buy another HP product again.

November 21 2012 at 5:51 AM Report abuse rate up rate down Reply

Fiorina lives on and on...................now Meg, could have gotten better tech for a tenth of the price.

Nobody seems to see the marketplace, or cares.

Autonomy Guys Gypsies ?

November 21 2012 at 4:29 AM Report abuse +1 rate up rate down Reply

HP is a joke to modern computer users with an IQ above 60. Cheep poor pruducts and horrid customer service.

November 20 2012 at 11:23 PM Report abuse rate up rate down Reply
Hey Razor

I have an HP printer for almost 10 years now and it works like a champ. Give HP a break guys they do make good products.

November 20 2012 at 11:15 PM Report abuse rate up rate down Reply

The Board of Directors for HP should first fire Meg Whitman, and then fire itself. All are equally incompetent.

November 20 2012 at 10:45 PM Report abuse rate up rate down Reply

Autonomy overstated Sales by $ 200 Mil.

So refund 4.0 Bil. of the Purchase $$$.

I know Nothing !

November 20 2012 at 10:27 PM Report abuse rate up rate down Reply

Dell is better

November 20 2012 at 9:49 PM Report abuse rate up rate down Reply