HP posts whopping $8.9bn loss

Computer giant HP has chalked up a $8.9bn (£5.6bn) loss in it is latest quarterly results due to write-downs on its poorly timed $13.9bn (£8.75bn) purchase of services company EDS.

It has also been affected by faltering PC, server and storage hardware sales, a tough economic climate in Europe and, perhaps ominously for the global economy, slowing growth in China.

Third-quarter revenues weighed in at $29.7bn (£18.7bn), which was down by five per cent compared to the third quarter in 2011, but down by just two per cent when adjusted for the effects of currency fluctuations. 

That poor headline result, though, hid a number of even worse performances across the group, although all areas – with the notable exception of software – posted reduced sales.

Revenue at the Personal Systems Group (PSG) – HP's PC-making arms – declined by 10 per cent, with commercial revenue down by nine per cent and consumer revenue down by 12 per cent.

In terms of units sold, sales of desktop PCs were down by six per cent, laptops were down by 12 per cent and total units were down by 10 per cent.

Sales of servers, storage and networking equipment declined by four per cent. Revenues of "business-critical systems" declined by a weighty 16 per cent, while storage revenues were down by five per cent.

The decline in sales of hardware mirrors Dell, which also warned yesterday that sales of both PCs and storage hardware had declined in the same quarter.

The one bright spot for HP was in software, where sales increased by 18 per cent, including results from its acquisition of Autonomy. Underneath the headline figures, though, software revenue was up by a more modest two per cent licence growth, while support revenues increased by 16 per cent and service by 65 per cent.

HP is the world's biggest PC-maker – just ahead of Dell. It employs 300,000 people but is in the process of reducing its headcount by about eight per cent or about 24,000 people.