Hewlett-Packard Co. shares hit a new 10-year low today, following yesterday's remarks by Chief Executive Officer Meg Whitman that HP's revenue would be down sharply next year.

In her words: "I've learned at HP that you do not get what you expect. You get what you inspect."

That's a good lesson for anyone reading corporate earnings reports, too, especially HP's. The first number in its Aug. 22 fiscal third quarter earnings release was a profit of $1 a share -- except that wasn't a real profit. It was calculated according to HP accounting rules, which are much more generous than generally accepted accounting principles. The GAAP number was a loss of $4.49 a share, or $8.9 billion.

The biggest expense HP excluded was an $8 billion charge to write down the value of goodwill, which is the bookkeeping entry a company records when it pays a premium price to buy another company. HP has bought lots of companies over the years, with awful results. The writedown was an admission that HP overpaid. But it also was a forward-looking indicator, because it meant HP had drastically cut its cash-flow projections for the future.

HP still had almost $37 billion of goodwill on its balance sheet as of July 31. That was more than its $32 billion of shareholder equity, or assets minus liabilities. Meanwhile, at about $14.75 a share this afternoon, the stock market says the whole company is worth only about $29 billion. The stock is down 14 percent since Tuesday's close.

Unfortunately for Whitman, who joined the company last year, goodwill isn't a saleable asset. It's nothing but hot air. Look for lots more red ink to come.

(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)

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