HP Acknowledges "Serious Accounting Improprieties" in Q4 Financial Statement
Hewlett-Packard today announced financial results for its fourth fiscal quarter and full fiscal year ended October 31, 2012, noting an $8.8 billion asset impairment charge related to the acquisition of software firm Autonomy. That's a pretty big write-off, and HP is essentially claiming fraud on the part of Autonomy.
"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," HP said in a statement.
HP acquired Autonomy a little over a year ago for $42.11 per share, or around $10.2 billion. It was one of the last decisions HP's previous CEO Leo Apotheker made before he was replaced with former eBay chief Meg Whitman. According to HP, Autonomy at the time misrepresented its value by $5 billion.
"This appears to have been a willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers," HP added. "These misrepresentations and lack of disclosure severely impacted HP management's ability to fairly value Autonomy at the time of the deal."
HP reported revenue of $120.4 billion for its full fiscal year, down 5 percent from one year ago and 4 percent when adjusted for the effects of currency. Personal Systems revenue declined 14 percent year-over-year, Printing revenue fell 5 percent, Services dropped 6 percent, and Enterprise Servers, Storage, and Networking (ESSN) declined 9 percent.
Not ever sector saw a drop in revenue. HP's Software revenue grew 14 percent year-over-year, while HP Financial Services revenue nudged up a percentage point compared to last year.
"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," HP said in a statement.
HP acquired Autonomy a little over a year ago for $42.11 per share, or around $10.2 billion. It was one of the last decisions HP's previous CEO Leo Apotheker made before he was replaced with former eBay chief Meg Whitman. According to HP, Autonomy at the time misrepresented its value by $5 billion.
"This appears to have been a willful effort on behalf of certain former Autonomy employees to inflate the underlying financial metrics of the company in order to mislead investors and potential buyers," HP added. "These misrepresentations and lack of disclosure severely impacted HP management's ability to fairly value Autonomy at the time of the deal."
HP reported revenue of $120.4 billion for its full fiscal year, down 5 percent from one year ago and 4 percent when adjusted for the effects of currency. Personal Systems revenue declined 14 percent year-over-year, Printing revenue fell 5 percent, Services dropped 6 percent, and Enterprise Servers, Storage, and Networking (ESSN) declined 9 percent.
Not ever sector saw a drop in revenue. HP's Software revenue grew 14 percent year-over-year, while HP Financial Services revenue nudged up a percentage point compared to last year.
