#HP GOOWILL WRITEDOWN SOFTWARE#
#HP GOOWILL WRITEDOWN PC#

“You want to start to clean out the channel in advance of releasing new products, so you don’t have a glut of older models out there.”

#HP GOOWILL WRITEDOWN PC#

Noland said he was concerned with HP’s report of an inventory build-up in the PC unit, after Dell reported this week its distributors and retailers are clearing out inventory in anticipation of selling new units with Microsoft’s upcoming Windows 8 operating system. There was more bad news within each division.

#HP GOOWILL WRITEDOWN SOFTWARE#

Only the software division, which contributes a tiny slice of HP’s revenue, saw sales rise 18 percent, to $973 million. And sales for both the printing and technology services divisions fell 3 percent. Revenue from commercial computing hardware was down 4 percent. While HP’s earnings were better than Wall Street expected, the company reported sales were down in all of its major segments. HP is “kind of caught in the middle, trying to invest in innovation and cut costs at the same time.” “There are companies with a lower cost structure, like Lenovo, and there are companies that have been much more innovative, like Apple ( AAPL),” he said. Whitman is attempting a major remake of the company and “she generally seems to be doing the right things, given the cards she’s been dealt,” Noland said, adding that Whitman appears to be streamlining the company’s consumer business and investing strategically in expanding the “enterprise” segments that sell hardware, software and services to big corporate customers.īut he agreed with Whitman that a turnaround “doesn’t happen overnight.”

While that will help HP lower its costs, he explained, “you’d rather hear that employees are really committed and think there are wonderful opportunities ahead and they don’t want to leave.”

The company revised its earnings forecast for the rest of the year, saying it expects to earn between $4.05 and $4.07 a share, excluding one-time costs, which is at the lower end of its previous target.Įven the greater-than-expected number of employees who opted for early retirement was a good-news, bad-news situation, Noland said. investment firm said investors were reacting to grim news on several fronts. HP’s stock fell more than 4 percent in late trading after the report. “Overall we have a very long way to go, but we are taking steps to fix the problem and help Autonomy succeed,” Whitman said.ĭespite these issues, Whitman called it “a decent quarter,” with the company exceeding guidance by delivering adjusted earnings of $1 per share. HP has struggled to increase sales and profit in that unit. Ultimately, the company plans to trim 27,000 jobs by 2014.Ībsent those charges, HP said it would have earned $2 billion in profit on its $29.7 billion in revenue for the quarter.Ī more recent problem with an acquisition is the performance of the British software company Autonomy, bought for $10.3 billion under prior CEO Léo Apotheker. More people are taking early retirements than expected this year. The loss also includes $1.8 billion in restructuring charges, primarily severance payments related to cutting its workforce. Under accounting rules, companies typically must take a write-down on what’s called “goodwill” when the business value of a large acquisition declines from the price for which it was purchased. The Palo Alto company disclosed last month that it would be taking a massive loss because of one-time charges, including a $9.2 billion write-down on paper related to its 2008 acquisition of tech services provider EDS and its earlier purchase of PC-maker Compaq. The $8.9 billion third-quarter loss was not unexpected. Whitman said Wednesday that the company has made progress but also faces many challenges, among them organizational issues, economic conditions in western Europe and Asia, a sales effort that is “not where it should be” and competitive difficulties in its software, networking and services businesses. Since taking over as CEO 11 months ago, Whitman has vowed to push the company to develop new tech products that are both innovative and profitable, but she has not yet reversed a steady decline in the company’s revenue. Its other business divisions are also challenged. HP, the world’s largest PC-maker, has struggled with slowing demand as more consumers opt to buy tablets and mobile phones instead of computers. “We’re on a journey here,” said Whitman, who has repeatedly warned that HP will need several years to turn its business around. And with sales down in all its major divisions, CEO Meg Whitman warned of tough times ahead.

Hewlett-Packard ( HPQ) delivered a sobering earnings report Wednesday, as accounting charges forced it to declare the biggest quarterly loss in its history.

Hp goowill writedown