American corporations have a habit of releasing bad information late on Friday afternoon.
Hewlett-Packard (HPQ) announced that it has revised its previously announced financial results for its first fiscal quarter ended Jan. 31, 2010, following developments in litigation involving Electronic Data Systems Corporation which HP acquired in August 2008.
The revisions reflect an increase in the amount of the contingency reserve previously established in connection with the litigation and resulted in a negative impact on HP’s first quarter net earnings of about $73 million, or $0.03 per share.
EDS and one of EDS’s subsidiaries are defendants in litigation filed in the United Kingdom by Sky Subscribers Services Limited and British Sky Broadcasting Limited in 2004 related t a customer relationship management project that was awarded to EDS in 2000.
As a result of the revisions, the company’s GAAP net earnings for the quarter has been revised to $2.25 billion and GAAP diluted earnings per share has been revised to $0.93 per share — down from GAAP net earnings of $2.32 billion and GAAP diluted EPS of $0.96 — as previously reported on Feb. 17, 2010.
In the same quarter a year ago, HP earned $1.9 billion or $.77 per share.
HP shares fell only 1% on the news.
Douglas A. McIntyre
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