Hewlett-Packard continues to feel the pain from its US$13.9 billion acquisition of IT services vendor EDS Systems back in 2008, a deal HP had hoped would put it on par with IBM Services. Instead, HP’s services business has underperformed, validating those critics who said the company greatly overpaid for EDS. The harsh impact of the enterprise services business will be felt in HP’s fiscal third quarter, when it takes an US$8 billion charge due to the falling value of the unit.
That impairment charge, combined with the US$1.5 to US$1.7 billion charge HP will be hit with over its plans to cut 27,000 jobs, will drive the company’s earnings-per-share down in a quarter that otherwise would have been solid for the massive tech vendor.
Source: Tech Week Europe