Photo: Associated Press
As HP writes down $8 billion from its acquisition of EDS in 2008, a certain a Wall Street analyst gets to say, “I told you so!” if he wants to.HP’s $13.9 billion purchase of EDS was then HP-CEO Mark Hurd’s signature deal. On the day that he announced it, he faced analysts. (Here’s a full transcript on Scribd.)
About halfway through the call, Bank of Montreal analyst Keith Bachman points out that EDS is no great catch. It had been its own “restructuring story over the last couple of years” with flat revenues and a stock that had fallen by 30% over the last 18 months.
“So clearly you are making a bet that you can perform better than how EDS has executed.” Bachman said and then asked Hurd what exactly will HP be “bringing to the party”?
Hurd’s answer: HP brought its good brand name to the party:
‘When you combine our position, our brand, our outsourcing business, their position, their capabilities, listen, we need to go to the market and compete and be able to grow at market rates,” Hurd said.
Bachman wasn’t having it.
“But Mark, sorry to push back, would you agree, looking at the characteristics, I would think at a minimum this is going to slowdown HP’s revenue growth,” Bachman replied.
Naturally Hurd disagrees, but then he hedges — just a little.
“If we can’t turn that into an opportunity to go to the market and compete and be able to compete at roughly market rates, then I think that we would have to say we are all not going to be thrilled,” he answers.
Funny thing is, now that Hurd is working for HP’s competitor, Oracle, he probably is thrilled.