HP DOJ Settlement Included in Q3 Preliminary Results
Hewlett-Packard Co. said that a settlement reached last week with the U.S. Department of Justice over a kickback scheme among technology companies working on government contracts that cost the vendor 2 cents per share against Q3 earnings has been included in its preliminary results for the period announced late last week.
The DOJ sued HP in 2007, alleging the company, along with Sun Microsystems Inc. and Accenture PLC, defrauded the government by making underhanded payments to partners on government technology contracts and submitting falsified claims bloated by illicit rebates.
While HP did not reveal an exact accounting of the DOJ settlement, reports pegged it at some $50 million.
Last Friday, HP said that it expects to post about $30.7 billion in revenue for its third fiscal quarter 2010, an 11 percent bump year-over-year, and per-share earnings of $.75, a 12 percent increase over the similar period last year.
The company said that the preliminary results for the period included the 2 cents per share settlement charge.
In 2007, the government joined so-called whistleblower suits filed against HP in 2004 by Norman Rille and Neal Roberts, former Accenture employees, under the False Claims Act. The Act, which dates to 1863, allows private citizens to sue on behalf of the government and share in any recovery.
Rille and Roberts claimed that HP, Sun and Accenture arranged the kickbacks that duped the government.
In announcing the settlement, HP issued a statement in which it denied any wrongdoing.
"HP denies engaging in any illegal conduct in connection with these matters. HP has agreed to a settlement with the Department of Justice, without any admission of wrongdoing, in order to resolve the allegations in full," officials said.
HP said that the settlement is subject to approval of the Department of Justice, appropriate agencies and the Court.
The company has scheduled an August 19 conference call to discuss final Q3 results with analysts.