The write-down is one of those accounting “things”. Its recognition that the investment in EDS was not as great an investment as HP originally thought it would be. Some would say, “Oh, a major mistake.” Others would say “market conditions.” Regardless, it’s a hit to goodwill and an expense to the income statement. It's a non-cash adjustment to the balance sheet. As a result of the charges, Hewlett-Packard said it would report a loss of $4.31 to $4.49 a share when it announces its third-quarter results on Aug. 22.
This week, an interesting move by by HP CEO Meg Whitman. The WebOS group is being spun off as an independent but wholly owned subsidiary. Its name, Gram. The tagline - “Potent. Light.
Nimble. At the core of all things
big and small.” Gram will be in stealth
mode for the next few months. An open
source version of WebOS will still take place in September.
My humble opinion is that the market will like
the Gram news on Thursday. It’s not a
light move, name notwithstanding! This gives Gram the opportunity to innovate more
quickly than it would if were still in the HP corporate framework. Not quite a skunk works.
Going against Gram is the fact they’ve lost brainpower over the last
several months. Reactions by tablet makers?
They probably won’t make any grand statements.
August 15 marked day 328 of Meg Whitman’s tenure
as CEO. The stock has dropped 15% since she took over as CEO, hitting a one-year
low of $17.41 in early August. Both the
Dow and NASDAQ are up a little over 20% during that time. Dell has dropped by about 12% over this
period.
Whitman has stated since the beginning of her tenure as CEO September 22 that the turnaround will take time. These and the layoffs announced in May are major moves. She and HP are
not standing still.
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1 comment:
Craig, thanks for the update on WebOS. I had early Palm devices, so I've generally been a fan of the technology. Technology isn't enough in a competitive marketplace, though.
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