Hewlett Packard continues to struggle and write-down $9.2 billion due to bad acquisition
August 23, 2012- Hewlett Packard announced on Wednesday its worst loss ever in the 73 years the company has been in business. The technology giant continues to struggle and that was compounded by a write-down of $9.2 billion.
The company, based in Palo Alto, California, dropped to an $8.9 billion loss for its most recent quarter that ended July 31. Revenue for HP dropped by 5% from the same quarter last year, which marked the fourth straight quarter of declines in sales.
The loss by HP was for the most part due to a write down that was previously announced of $8 billion, for the acquisition in 2008 of the company Electronic Data Systems and other restricting charges that did not involve the acquisition. However, the company has struggled even without one-time write offs and for the current quarter provided a forecast that was downbeat.
Meg Whitman, the HP CEO said the company was still in the very early stages of its turnaround. She said it could take as long as five years to correct itself. She said the challenges had been due to its own decisions, industry trends and the economy.
Shares of HP have dropped by 25% during the year and on Wednesday following the announcement were down nearly 4% to just $19.20. The results from HP were announced just a day after Dell Inc., one of HP’s biggest rivals posted quarter earnings that were weak with profits that fell 18% and a decline in revenue of 8%.