HEWLETT-PACKARD reported a loss of $8.85 billion (€7 billion) last night after a massive writedown of the value of its services business, most of which was related to its purchase of Electronic Data Systems Corp (EDS).

The world’s largest PC maker said net revenue in the fiscal third quarter fell 5 per cent to $29.7 billion, slightly below the average Wall Street estimate of $30.1 billion. It took a charge of $10.8 billion, mostly related to the writedown of its services business, which it had announced earlier this month.

HP, which like smaller rival Dell is struggling to offset faltering PC sales with services revenue, posted a net loss of $4.49 a share in its fiscal third quarter that ended July 31st, versus a profit of $1.9 billion, or 93 cents a share, a year earlier.

Excluding items such as the writedown, it earned $1 a share, outstripping Wall Street’s target of 98 cents.

The stock was trading up 2.3 per cent at $19.66 in after-hours, from a close of $19.20 on the New York Stock Exchange.

The company, which employs more than 300,000 people globally, is undergoing a multi-year restructuring that includes reducing its employee base by 8 per cent.