- HP writes down the value of EDS
- Computer giant also is taking charges on costs related to job cuts
- More employees taking early retirement than expected
Hewlett-Packard (IW 500/7) on Wednesday announced a quarterly loss of $8.9 billion as the U.S. 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 multiyear turnaround, and we're making decent progress despite the headwinds," said Meg Whitman, president and chief executive officer, in announcing results for the fiscal third quarter.
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 some $8 billion to mark down the value of EDS, a services group it acquired in 2008.
The Palo Alto, Calif., giant, the world's biggest maker of personal computers, also is taking a charge to cover the costs of cutting some 27,000 jobs, or 8% of its global workforce, by 2014 in a major restructuring.
The move is expected to generate annualized savings of $3 billion to $3.5 billion for HP, which is struggling amid a move to mobile devices and tablet computers.
Earlier this month, HP said more employees than anticipated were taking early retirement and that the cost of the reorganization would rise to between $1.5 billion and $1.7 billion.
Revenues Below Forcecast
The results unveiled Wednesday showed that excluding the hefty charges, the company showed a profit of $1 per share, slightly better than expected, while revenues were below forecasts at $29.7 billion, a year-to-year drop of 5%.
In the same period a year ago, HP posted a profit of $1.9 billion.
