Hewlett-Packard says victim of accounting fraud, shares sink 11%

Hewlett-Packard says victim of accounting fraud, shares sink 11%

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Hewlett-Packard said on Tuesday it took an $8.8 billion charge related to its acquisition of software firm Autonomy, citing "serious accounting improprieties," as it swung to a fourth-quarter loss.

HP said that personal computer sales shrank again and its quarterly revenue fell 6.7 percent. HP's stock dropped 6.6 percent in premarket trading.

The Silicon Valley technology company, in the midst of a multiyear turnaround plan, said the charge is linked to the "associated impact of those improprieties, failures and misrepresentations on the expected future financial performance of the Autonomy business over the long-term."

HP said the accounting issues happened prior to its acquisition of Autonomy in 2011 for $11.5 billion. HP had been criticized by analysts for overpaying.

Net revenue fell 6.7 percent to $29.96 billion for the fourth quarter ended October 31 from $32.12 billion a year. Analysts, on average, expected $30.43 billion, according to Thomson Reuters I/B/E/S.

The personal computer maker, which employs more than 300,000 people globally, is undergoing a restructuring aimed at focusing the sprawling company on enterprise services, in the mold of International Business Machines.

Revenue from all of its main business units fell, with the personal computer division recording the steepest drop at 14 percent.

Story first published on: November 20, 2012 18:54 (IST)

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