/// The Pressure Is on HP to Stand and Deliver in 2013

December 31, 2012  |  All Things Digital


Today marks the end of what has been without a doubt the worst year in Hewlett-Packard’s corporate history. You could argue that 2011, marked by the brief period that Léo Apotheker was CEO, was worse in many ways, and that the difficulties the company struggled to correct in 2012 were created in the prior year. But by all the metrics that count, the year now ending was a whopper: Sales on an annual basis fell by more than 5 percent to $120.4 billion, and on a GAAP basis it swung from a $7 billion profit to a $12.6 billion loss. Much of those losses can be attributed to a combined $17 billion in write-downs taken during the second half of the year. The biggest was the $8.8 billion write-down announced on Nov. 20 , of which $5.7 billion was attributed to Autonomy, the British software firm HP acquired for north of $11 billion in 2011. Another $8 billion was the result of an impairment charge related to EDS, the IT services concern HP acquired in 2008 for $14 billion

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The Pressure Is on HP to Stand and Deliver in 2013


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/// The Pressure Is on HP to Stand and Deliver in 2013

December 31, 2012  |  All Things Digital


Today marks the end of what has been without a doubt the worst year in Hewlett-Packard’s corporate history. You could argue that 2011, marked by the brief period that Léo Apotheker was CEO, was worse in many ways, and that the difficulties the company struggled to correct in 2012 were created in the prior year. But by all the metrics that count, the year now ending was a whopper: Sales on an annual basis fell by more than 5 percent to $120.4 billion, and on a GAAP basis it swung from a $7 billion profit to a $12.6 billion loss. Much of those losses can be attributed to a combined $17 billion in write-downs taken during the second half of the year. The biggest was the $8.8 billion write-down announced on Nov. 20 , of which $5.7 billion was attributed to Autonomy, the British software firm HP acquired for north of $11 billion in 2011. Another $8 billion was the result of an impairment charge related to EDS, the IT services concern HP acquired in 2008 for $14 billion. If 2012 was the year that HP sought to package up all the toxic accounting and financial disclosures it could find, then 2013 either will or won’t be the year where it starts down the path toward recovery and turnaround. While HP is technically shut down now for the holidays, people I’ve talked to there in recent days tell me that the internal message being broadcast to employees at all levels is consistent: This year, everyone has to deliver. Investors frustrated by the decline in value in HP’s shares in 2012 — at $13.68, as of Friday’s close, the shares are down nearly 49 percent this year — have largely come to terms with the notion that HP had to suffer through a horrible year in order to begin the arduous process of rebuilding its business and balance sheet, though the company and its CEO, Meg Whitman, have essentially exhausted their indulgences . At a meeting of financial analysts in October, Whitman portrayed 2013 as a “ fix and rebuild ” year, and so the fixing and rebuilding will, a year from now, have to be apparent.

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The Pressure Is on HP to Stand and Deliver in 2013


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