HP cuts reported profit on additional BSkyB legal costs
- — 06 March, 2010 09:45
Hewlett-Packard has been forced to reduce the amount of profit it reported last quarter to cover additional costs awarded against its EDS division in a lawsuit brought by British Sky Broadcasting in the U.K.
On Monday a U.K. court ordered EDS to make an interim payment to BSkyB of £70 million, or about $US112 million, which was on top of the £200 million HP had already paid out last month.
The extra payment means HP had to increase the money it had set aside to cover costs of the litigation, which in turn lopped about $73 million, or $0.03 per share, off its first-quarter profits, HP said Friday.
BSkyB sued EDS in 2004 over a CRM (customer relationship management) project it had been awarded four years earlier. BSkyB accused EDS of misrepresenting itself in a sales pitch, and HP inherited the suit when it bought EDS in 2008.
The court dismissed most of the claims against EDS in January, but HP was still left with significant penalties. It is trying to get permission to appeal the parts of the ruling that went against it.
The revision cut HP's first-quarter net earnings to $2.25 billion, or $0.93 per share, down from the $2.32 billion, or $0.96 per share, it had reported previously. HP reported the results Feb. 17.