HP reports $8.9b loss in Q3

HP sees worst Q£ loss in its history
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Hewlett-Packard has put its $8.9b Q3 loss down to weak hardware sales and writedowns.

Seen as the worst loss in HP’s history, the company has warned that struggles could persists into 2013.

"HP is still in the early stages of a multi-year turnaround, and we're making decent progress despite the headwinds. During the quarter we took important steps to focus on strategic priorities, manage costs, drive needed organisational change, and improve the balance sheet. We continue to deliver on what we say we will do," HP CEO Meg Whitman said in a statement on Wednesday.

Revenue for the third quarter fell 5 percent year over year to $29.7 billion.

Without the writedowns and other one-time costs, third-quarter profits would have been $1.97 billion, down 9 percent year over year.

Software sales rose 18 percent to $973 million, driven by last year's acquisition of Autonomy.

Commenting on HP’s quarterly earnings, Victor Basta, managing director of Magister Advisors, said: “HP’s failure is in stark contrast to the success of companies such as IBM, and Dell. IBM has completely transformed itself from a hardware company to a software and services business. Dell is one of the most active buyers of software companies, recently completing its largest buy, Quest Software for $2.4bn.

“Transitioning from a hardware business to a software business requires a fundamental shift in corporate culture –this is one key ingredient that cannot be bought. The trouble is that HP, like California, the state in which is it headquartered, is an ungovernable entity. Its CEO, Meg Whitman, has traded the California Governor’s seat for a similar role in the corporate world.”

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