A split would be an about-face on CEO Meg Whitman's original strategy to keep the company together
By Marc Ferranti | 05 October 14
Reversing the corporate strategy CEO Meg Whitman set three years ago, Hewlett-Packard is set to announce as early as Monday that it will split off its PC and printer business into a separate, publicly traded company, according to the Wall Street Journal.
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A split-up would be an about-face on the path Whitman set when she took the reins from former HP chief Leo Apotheker in 2011. At the time, she decided to reverse Apotheker's decision to spin off the PC business, saying PCs were key to long-term relationships with customers.
But the idea of splitting HP into a strong, nimble PC hardware business and a more focused enterprise company has lingered. There is precedent in the tech industry for the move. An HP without a PC and printer business would look something like arch-rival IBM, which has focused on enterprise technology and services after selling off first its PC operations, and then its server business, to Lenovo.
With HP's PC business coming off a strong quarter, it might be the right time for the move. Combined, HP's PC and printing operations contributed 50 percent of the company's quarterly net revenue of $27.6 billion.
PC revenue was up 12 percent year over year during the quarter. Though printer sales declined, it is a particularly profitable business, generating operating profit of $1.03 billion compared to the PC unit's $346 million. Sales for all other business segments, hurt by softness in software and services, declined 2 percent.
The split-up will happen next year, according to the Wall Street Journal story, citing sources familiar with the matter.
Whitman will be chairman of the PC and printer business and CEO of the separate, enterprise-focused company, according to the story. Current lead independent director Patricia Russo, former CEO of Alcatel-Lucent, will be chairman of the enterprise company. Dion Weisler, who has been executive vice president of printing & personal systems since June 2013, will be CEO of the PC and printer operation.
An HP official said the company declined to comment.
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