HP Loses $9 Billion in Three Months (7.27 billion Euro)

This is the biggest loss ever to be reported by the top PC maker

By on August 9th, 2012 08:39 GMT

There aren't many ways one can interpret a huge monetary loss like the one Hewlett-Packard expects to post for the third quarter of 2012, but the company did its best to eliminate foul rumors before they started.

Before we say anything more, we should mention that HP is speaking of the third quarter of its fiscal year 2012, not the calendar year.

Due to when it was established and how it has chosen to report on its finances ever since, the company entered Q3 of FY2012 on May 1. Thus, third quarter of FY 2012 ended on July 31.

It so happens that the April-July period put HP through the wringer, enough to cause the greatest ever quarterly loss.

The sum is of about $9 billion (7.27 billion Euro), or $8.85 (7.15 billion Euro) billion if we really need to be exact.

The unfortunate irony is that HP's products, overall, actually scored good sales between the aforementioned dates.

It is the reorganization currently in progress, as well as a one-time charge related to the 2008 acquisition of Electronic Data Systems that will make short work of that success.

For those who don't know about it, the merger between HP and Electronic Data Systems was valued at $14 billion back then (11.31 billion Euro).

As part of the contract, 8 (6.46 billion Euro) have to be paid this year, hence the huge loss. HP implied that the matter was a bit more complicated, that the “impairment review stems from the recent trading values of HP’s stock, coupled with market conditions and business trends within the Services segment,” but that's still the gist of it.

Finally, for those hoping that HP would reconsider the massive layoffs announced in June, we can report no such luck. The corporation will proceed with its fundamental reorganization as planned.

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