HP Issues Statement in Response to Market Confusion Around Its 10-Q Filing
PALO ALTO, Calif., March 13, 2003
HP (NYSE:HPQ) today issued the following statement in response to market confusion around its 10-Q filing.
"As part of our normal controls process in preparation for our official 10-Q filing, we discovered an accounting classification error," said Bob Wayman, HP chief financial officer. "We obviously regret this error and the confusion caused by a reported cash flow from operations in Q1 of $647 million in our official 10-Q filing versus the $791 million we reported in our preliminary cash flow statement. We are reviewing our procedures for preparing preliminary statements. The important takeaway for investors from both our earnings call and yesterday's 10-Q filing is that our gross cash position of $13.2 billion is strong and unchanged."
"Our PC business performance also continues to be the subject of continued confusion," said Wayman. "In our latest Q1, we reported a profit of $33 million in our Personal Systems business -- a sequential improvement of $101 million in operating performance from a loss of $68 million the preceding quarter. On a combined company basis, the PC business lost $52 million a year ago. The improvement year over year was $85 million. By every measure, this represents real profitability and real performance improvement."
Finally, in response to continued speculation around revenue loss, the company reported that for the 2002 fourth calendar quarter period, in line with the reporting periods of many of its peers, revenues would have been up 9% sequentially. Wayman added: "One month into the company's second fiscal quarter, revenue for the combined company is up 3% year over year."
HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP completed its acquisition of Compaq Computer Corporation on May 3, 2002. More information about HP is available at http://www.hp.com.
This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include employee management issues; the timely development, production and acceptance of services and their feature sets; the challenge of managing asset levels, including inventory; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's annual report on Form 10-K for the year ended October 31, 2002, as filed with the Securities and Exchange Commission on January 21, 2003, and subsequently filed reports. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, HP's results could differ materially from HP's expectations in these statements. HP assumes no obligation to update these forward-looking statements.