HP Revises First Quarter Results due to Litigation Involving EDS

Hewlett-Packard (News - Alert) has revised its previously-announced first-quarter results as a result of litigation involving EDS (News - Alert), which the company acquired in 2008, resulting in a negative impact on its first quarter net earnings of approximately $73 million, or $0.03 per diluted share.

EDS, now HP Enterprise Services, is a defendant in a 2004 lawsuit filed in the United Kingdom by Sky Subscribers Services Ltd and British Sky Broadcasting (BSkyB (News - Alert)) relating to a project awarded to EDS in 2000.

 

According to HP, EDS had to make an interim payment to BSkyB of roughly $112 million by March 1, as per a court order. This payment was in addition to an interim payment of $320 million that HP voluntarily made to BSkyB in February.

 

As a result, HP said it determined that it was appropriate to increase the contingency reserve. As a result, the company's net earnings for the quarter ended Jan. 31 were revised to 93 cents a share, down from the 96 cents a share previously reported.