HP Gets Earnings Beat but Takes Autonomy Hit (Update 3)
Updated with additional conference call comments from HP CEO Meg Whitman on Autonomy.
NEW YORK (TheStreet) -- HP(HPQ) beat Wall Street's earnings estimates in its fourth-quarter results on Tuesday, but missed analysts' top-line forecasts.
The company's purchase of U.K. software maker Autonomy last year has been thrust into the spotlight, however, as HP recorded a non-cash charge of around $8.8 billion related to the deal.
"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," explained HP, in a statement released before market open.
The company's shares tumbled 9.55% in premarket trading to $12.03 on the news.
"These improprieties were discovered through an internal investigation after a senior member of Autonomy's management team came forward following the departure of
HP has reported the accounting improprieties to the Securities and Exchange Commission and the U.K's Serious Fraud Office, she added, and also intends to seek redress through the civil courts.
"This will take a long time to work through, but we're committed to seeking redress for our shareholders," she said, in response to an analyst's question. "I expect that this will be a multi-year process in the courts of both countries."
HP reported revenue of $30 billion, compared to $32.1 billion in the prior year's quarter. Excluding items, HP reported earnings of $1.16 a share, down from $1.17 a share in the same period last year. Analysts surveyed by Thomson Reuters were looking for sales of $30.43 billion and earnings of $1.14 a share.