Hewlett-Packard on Wednesday announced a quarterly loss of US$8.9 billion as the US computer giant was forced to write down the value of some assets and take hefty reorganizational charges.
“HP is still in the early stages of a multi-year turnaround, and we’re making decent progress despite the headwinds,” Meg Whitman, president and chief executive officer, said in announcing results for the fiscal third quarter.
Rival Dell said on Tuesday profits for its second quarter fell 18 percent from a year ago to US$732 million and lowered its outlook for full-year earnings as the US tech firm faced a “challenging” PC market.
HP was forced to book a loss under accounting rules, to reflect the lower value of some assets. It had previously announced this would be about US$8 billion to mark down the value of EDS, a services group it acquired in 2008.
The Palo Alto, California giant, the world’s biggest maker of personal computers, is also taking a charge to cover the costs of cutting about 27,000 jobs, or 8 percent of its global workforce, by 2014 in a major restructuring.
The move is expected to generate annualized savings of US$3 billion to US$3.5 billion for HP, which is struggling amid a move to mobile devices and tablet computers.
“During the quarter we took important steps to focus on strategic priorities, manage costs, drive needed organizational change, and improve the balance sheet,” Whitman said Wednesday. “We continue to deliver on what we say we will do.”
The results unveiled on Wednesday showed that excluding the hefty charges, the company showed a profit of US$1 per share, slightly better than expected, while revenues were below forecasts at US$29.7 billion, a year-to-year drop of 5 percent.
‧ The company marked down the value of EDS by about US$9 billion.
‧ It took a charge to cover the costs of cutting about 8 percent of its global workforce by 2014.
‧ Revenues were below forecast at US$29.7 billion.
In the same period a year ago, HP posted a profit of US$1.9 billion.
HP also lowered its estimate for full-year earnings to between US$4.05 and US$4.07 per share.
In after-hours trade, HP rose 2.24 percent to US$19.63 on the news, which hinted that the turnaround was on track.