HP Remains Committed to Autonomy Amid Accounting Claims

Hewlett-Packard Co. (HPQ) Chief Executive Officer Meg Whitman said the Autonomy software unit, an acquired business that contributed to an $8.8 billion writedown amid allegations of financial misreporting, can still boost sales.

“We remain 100 percent committed to Autonomy’s industry- leading technology and its employees,” Whitman said at a customer conference in Frankfurt today. Autonomy’s technology is “incredible” and will help to spur growth at Palo Alto, California-based Hewlett-Packard, she said, adding that the unit is essential to the company’s progress.

At the Discover conference, which runs Dec. 4 to 6, Hewlett-Packard is releasing new software in its Autonomy line of data-analysis tools that help companies comply with local and federal rules.

Whitman is aiming to eke growth from Autonomy, which she and fellow board members agreed to buy for $10.3 billion last year. Hewlett-Packard accused former managers of the software company of misrepresenting sales, saying that “serious accounting improprieties” were responsible for $5 billion of the writedown.

“We’ve turned over the investigation to the SEC in the United States and the Serious Fraud Office” in the U.K., Whitman said today at the Frankfurt conference when asked about Hewlett-Packard’s contact with former Autonomy executives. “That’s all I’m prepared to say on the issue.”

Latest Blow

The company said Nov. 20 that Autonomy booked hardware sales to appear as more profitable software, and used transactions with resellers of its software to accelerate revenue recognition or fabricate sales.

The Autonomy charge is the latest blow for leadership at a company that’s suffered through years of botched deals, management tumult and strategic missteps. Hewlett-Packard has plunged more than 70 percent since it ousted former CEO Mark Hurd in August 2010.

Former Autonomy Chief Executive Officer Mike Lynch, in an open letter, last month challenged Hewlett-Packard’s board to explain allegations that former Autonomy managers misled investors and prospective acquirers with falsified statements. Hewlett-Packard rejected the request, saying it has uncovered extensive evidence of improper bookkeeping and that it’s leaving the matter with government officials.

Management Changes

The stock rose 5.1 percent to $13.53 at the close in New York, and has more than recouped its losses since the Autonomy writedown was announced. The shares have declined 47 percent so far this year.

HP today named Mike Nefkens executive vice president of its enterprise services. Nefkens had been holding this position on an interim basis since August, when HP replaced John Visentin, the executive who’d been promoted to the job by former CEO Leo Apotheker.

Whitman took the reins last year in September from Apotheker, whose 10-month tenure was marked by strategy shifts and sales-forecast shortfalls.

The Discover conference will also feature an address on Dec. 5 from personal-computer and printing group head Todd Bradley, and the company plans additional product announcements at the conference.

Hewlett-Packard is also updating a separate tool called Vertica Analytics Platform that can analyze large volumes of data from companies’ on-site computer programs and the Web.

To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net; Alex Webb in Frankfurt at awebb25@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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