(Reuters) - Hewlett-Packard stunned Wall Street by alleging a massive accounting scandal at its British software unit Autonomy and announced an $8.8 billion writedown, the latest in a string of reversals that renewed questions about the competence of the storied company’s board and senior managers.
The massive non-cash charge deals the latest blow to a company counted as one of the founding members of Silicon Valley but now greatly diminished and trying to regain its dominance of the industry through an internal overhaul.
Here’s a look at how HP’s star is waning:
- HP still ranks among the world’s largest technology corporations by sales, with more than $120 billion in revenue in 2012. But sales dipped in four of its five major divisions in fiscal 2012, and Apple Inc now claims the crown with more than $150 billion in revenue in its fiscal 2012.
2012 sales vs 2011
Personal Systems $35.65 bln down 10.0 pct
Services $34.92 bln down 2.2 pct
Printing $24.49 bln down 6.5 pct
Servers, networking $20.49 bln down 7.1 pct
Software $ 4.06 bln up 20.6 pct
- Stock: With Tuesday’s 12-percent decline, the share price is now at a decade low. At its trough during regular trading, it hit $11.35 a share, its lowest since October 10, 2002 when it hit $11.14 a share.
- Market value: HP’s capitalization now stands just north of $22 billion, a far cry from its peak in April 2000 of about $155 billion. As recently as November 2010, HP was worth $100 billion.
The company now trades at 3.3 times forward earnings, a sliver of the U.S. computer hardware sector’s 23 times average, according to Thomson Reuters data. By comparison, Apple Inc trades at 11 times projected earnings.
HP’s shares trade at 0.7 times the company’s book value, versus rival Dell Inc’s 1.5 times.
- Market position now:
HP has led the industry in personal computer sales for years. But in October, Gartner estimated that China’s Lenovo Group Ltd had edged out the Silicon Valley icon for the top spot worldwide in the third quarter.
Rival IT research outfit IDC estimated that HP clung to its lead in the quarter, but remained ahead of the Asian firm by less than half a percentage point.
- Acquisition spending:
Autonomy adds to HP’s worsening acquisition track record. In August the company wrote down nearly $11 billion of the value of its services business, much of which it acquired four years ago with its $14 billion purchase of EDS.
In 2002, it bought PC maker Compaq for $25 billion after a highly public internal rift. It also expanded HP’s footprint vastly in a personal computing industry that years later is struggling to grow.
Editing by Phil Berlowitz