Hewlett-Packard said Tuesday it is taking an $8.8 billion charge in its latest quarter to align the accounting value of a British company it acquired for $10 billion last year.
HP says Autonomy, a search engine maker, lied about its finances, resulting in a massive write-down of the value of the business. CEO Meg Whitman is avoiding calling it a fraud, but a company statement says there were "serious accounting improprieties, disclosure failures and outright misrepresentations at Autonomy."
HP (HPQ) shares plunged 13.5% as the market opened, pulling the stock to $11.50 a share, near a record low.
HP's net loss for the fiscal fourth quarter, which ended Oct. 31, amounted to $6.85 billion, or $3.49 per share. That compares with net income of $239 million, or 12 cents per share, in the same period last year.
It was the second mammoth loss in a row for HP. In the third fiscal quarter, it lost a record $8.86 billion, or $4.49 per share. That was due to a charge for another acquisition - that of Electronic Data Systems, a technology consulting service that it bought for $13 billion in 2009. In that case, HP didn't blame improper accounting, just results that didn't live up to expectations.
Excluding the charges in the latest quarter, HP earned $1.16 per share in the latest quarter, just above the average analyst forecast of $1.14 per share, as polled by FactSet.
HP's revenue was $30.0 billion, down 7% from last year. That was below analyst expectations at $30.5 billion.
On Monday, HP shares had surged more than 3% in advance of its scheduled fourth-quarter earnings report, raising questions about what might be afoot at the stumbling PC maker.
Rival Dell on Thursday disappointed Wall Street, reporting a 19% year-on-year decline in personal computer revenue. Dell's earnings disappointment was a harbinger of bad news for HP, analysts say.
HP installed former eBay CEO and California gubernatorial candidate Meg Whitman as chief executive in September. The move came after a disastrous 10-month stint by former CEO Leo Apotheker.
In August, Apotheker stunned the industry with a proposal to spin off or sell the PC unit, which accounted for more than $40 billion in revenue and $2 billion in operating profit last year. Whitman quickly reversed course on the move to jettison the personal computer business, but the uncertainty had already done damage to its business.
PC giant HP's stature as worldwide personal computer leader was toppled last month by Lenovo, according to researcher Gartner.
Contributing: Scott Martin in San Francisco