HP sales down across the board as botched acquisitions take their toll

By Graeme Burton
20 Nov 2012 View Comments
HP's Meg Whitman

HP has reported almost across-the-board declines in revenue in its fourth-quarter and full-year results, which were capped by claims of accounting irregularities at Autonomy, the intelligent-search software vendor it acquired for $11.1bn (£7bn) in August 2011.

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HP filed some $8.8bn (£5.5bn) in write-downs, of which around $5bn (£3.15bn) were attributed to a write-down in the value of its Autonomy acquisition – which has underperformed financially all year.

However, that bombshell distracted attention away from a broader emerging disaster at HP, with sales of PCs, servers, printers and services all falling, both in the fourth quarter and in its results for the last fiscal year.

The company achieved total sales of $120.4bn (£75.6bn) in the fiscal year to the end of October 2012, down by five per cent on the company's performance in 2011. Its fiscal 2012 net loss weighed in at $12.65bn (£7.95bn) after "goodwill impairments" of $18bn (£11.3bn).

In the fourth quarter, revenues declined by seven per cent to $30bn (£18.85bn).

In the fourth quarter, the Personal Systems group – which covers PCs, laptops, netbooks and other devices – posted a 14 per cent drop, with commercial revenues down by 13 per cent, and consumer by 16 per cent. Total unit sales fell by 12 per cent across the board. 

Printer revenues fell by five per cent, with unit sales plunging by one-fifth. Commercial hardware unit sales fell by 15 per cent and consumer printer sales dropped by 20 per cent.

All areas of HP's services business also posted revenue drops, averaging six per cent, while Enterprise Servers, Storage and Networking revenue declined by nine per cent – with only networking revenues increasing by seven per cent in the quarter.

Software revenue was up, though, by 14 per cent, year-on-year, with overall licence growth up nine per cent, support up by the same amount, and software services up by 48 per cent.

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