Hewlett-Packard Company (NYSE:HPQ) and its CEO Meg Whitman have received a court order to face claims in a shareholder securities class action. After Hewlett-Packard Company (NYSE:HPQ) wrote-down $8.8 billion on the acquisition of Autonomy Corp., its investors sued the company. Investors alleged that the computer maker and its CEO misled them. Dutch pension fund PGGM Vermogensbeheer B.V. is the lead plaintiff.
Hewlett-Packard CEO omitted key information
Charles Breyer, a U.S. District Judge in San Francisco, ruled Tuesday that investors can go ahead with allegations against the Palo Alto-based company and its CEO Meg Whitman. At the heart of the class action are the statements made by Meg Whitman in May and June 2012 about Autonomy Corp. District Judge Breyer said that Meg Whitman omitted key information that complainants say she possessed at the time. The ruling states that Whitman was considering accounting discrepancies at Autonomy as an excuse for poor performance of her company, reports Casey Sullivan of Reuters.
Judge Breyer also pointed out Hewlett-Packard Company (NYSE:HPQ)’s quarterly results filing in September 2012. The filing said the fair value of the British software company approximated the carrying value. Breyer said that statement was misleading as the U.S. IT company already knew it might have substantially overpaid to acquire Autonomy. However, Judge Breyer dismissed claims against former Autonomy chief Mike Lynch, ex-Hewlett-Packard Company (NYSE:HPQ) CEO Leo Apotheker and three other executives.
However, Judge Breyer said the claims against Hewlett-Packard Company (NYSE:HPQ) and Meg Whitman will be limited to after May 23, 2012.
Hewlett-Packard beats estimates
Meg Whitman is leading Hewlett-Packard Company (NYSE:HPQ) through a transformation. PC sales continue to decline, and it failed to shift to mobile devices. Whitman has been cutting costs and making business units more efficient to revive the company.
Yesterday, the company reported its fourth quarter and full year results. Its full year profits topped $5.1 billion with $112.3 billion in sales. The company had incurred a loss of $12.7 billion on revenue of $120.4 billion in the previous fiscal year that ended October 31, 2012. For the fourth quarter, Hewlett-Packard Company (NYSE:HPQ) earned $1.4 billion with $29.1 billion in sales.
Hewlett-Packard Company shares soared 6.14% to $26.63 in pre-market trading.
