August 23, 2012 - 10:34 AMT
PanARMENIAN.Net - Hewlett-Packard Co swung to an $8.9 billion quarterly loss as personal computer sales shrank again and it swallowed a huge write-down linked to its $13.9 billion purchase of Electronic Data Systems Corp.
According to Reuters, the company also on Wednesday, Aug 22 reduced its full-year earnings outlook slightly to the low end of its previous range, responding to a faltering PC market as well as touch economic conditions in Europe and also China, where growth too is slowing. Its shares slid more than 4 percent in late trading.
The No.1 personal computer maker, which employs more than 300,000 people globally, is undergoing a multi-year restructuring aimed at focusing the sprawling corporation on enterprise services, in the mold of IBM. The plan calls for reducing its employee base by 8 percent.
HP will have gone through about half of its targeted job reductions by the end of the fiscal year, HP's Chief Financial Officer Cathie Lesjak said in an interview. It cut 4,000 jobs in fiscal third quarter and will likely have shorn 11,500 jobs by end of fiscal 2012, she said.
The massive quarterly loss was expected as the company said earlier this month that it would take a noncash charge of $8 billion, primarily writing down the value of its 2008 acquisition of EDS for $13.9 billion.
Revenue from all of HP's main business units fell, with the personal computer division unsurprisingly recording the steepest drop of 10 percent, to $8.6 billion.
Services revenue dipped just 3 percent to $8.8 billion, edging past Personal Systems Group -- which includes PCs -- to become the company's largest sales generator in the quarter that ended July 31.
HP's business continued to be hit by a slowing economy in most of its biggest regions, including Western Europe and China.