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By GINA CHON
Hewlett-Packard Co., the world's biggest computer maker, said it is exploring a spinoff of its PC business as the technology giant lowered its financial targets for the third time this year.
The company also said it is in discussions to acquire U.K. software firm Autonomy Corp. Autonomy in a statement confirmed discussions "regarding a possible offer" by H-P. People familiar with the matter said the transaction could be worth about $10 billion.
H-P, which accelerated the release of its financial results for its third quarter, said its board has authorized the exploration of strategic options for its PC business, which could include a "full or partial separation." The PC business had revenue of $9.4 billion in the second quarter and accounts for about a third of H-P's revenue.
As part of Hewlett-Packard's planned spinoff of its PC business, it will keep the webOS software business but let go of the hardware, meaning H-P is shutting down its tablets business, people familiar with the matter said. H-P's tablet is the TouchPad, an iPad rival that went on sale in July starting at $499. Earlier this month, H-P cut its price 20%.
H-P got webOS when it acquired smartphone maker Palm Inc. in April 2010 for $1.2 billion. H-P may license the webOS software to others, the people added. The spinoff doesn't include printers, storage or networking, the people said.
H-P, the world's biggest computer maker, is expected to spin off its PC business and is close to a $10 billion deal to acquire U.K. data-analytics firm Autonomy. Dennis Berman has details.
.The Palo Alto, Calif., technology giant has been under investor pressure because of what is seen as its underperforming stock price and there have been investor calls to explore options for its low-margin PC business.
For the fiscal third quarter, H-P reported preliminary earnings of 93 cents a share on revenue of $31.2 billion, compared with a profit of 75 cents a share and $30.7 billion in revenue a year earlier.
But for the fiscal fourth quarter, the company lowered its profit and revenue goals and said it expects to take a large charge to restructure and shut down its webOS business. It also lowered full-year revenue forecasts.
The PC unit was expanded in 2002 following the acquisition of Compaq Computer Corp. First announced almost exactly 10 years ago, the Compaq deal was hugely contentious. A megamerger of two of the biggest names in computers, printers and computing services, it came as both H-P and Compaq were trying to outfox then PC king Dell Inc. Now, H-P is the world's biggest marker of personal computers.
H-P was also in the spotlight after its former Chief Executive Mark Hurd left the company last year amid a scandal, and current CEO Leo Apotheker stepped in.
Mr. Apotheker, a former software executive, has been developing a new strategy for H-P based on technology services and software. The company has twice lowered its profit and revenue forecasts for the current fiscal year.
Autonomy, founded in 1996 and based in the Cambridge, England, makes software that helps companies keep track of their mass of emails, phone calls and documents. It had revenue of $256 million in the second quarter.
Shares of H-P, rebounded on news of the breakup, and were recently down 1.4% to $30.95 in midday U.S. trading amid a broad market selloff.
Hewlett-Packard Co., the world's biggest computer maker, said it is exploring a spinoff of its PC business as the technology giant lowered its financial targets for the third time this year.
The company also said it is in discussions to acquire U.K. software firm Autonomy Corp. Autonomy in a statement confirmed discussions "regarding a possible offer" by H-P. People familiar with the matter said the transaction could be worth about $10 billion.
H-P, which accelerated the release of its financial results for its third quarter, said its board has authorized the exploration of strategic options for its PC business, which could include a "full or partial separation." The PC business had revenue of $9.4 billion in the second quarter and accounts for about a third of H-P's revenue.
As part of Hewlett-Packard's planned spinoff of its PC business, it will keep the webOS software business but let go of the hardware, meaning H-P is shutting down its tablets business, people familiar with the matter said. H-P's tablet is the TouchPad, an iPad rival that went on sale in July starting at $499. Earlier this month, H-P cut its price 20%.
H-P got webOS when it acquired smartphone maker Palm Inc. in April 2010 for $1.2 billion. H-P may license the webOS software to others, the people added. The spinoff doesn't include printers, storage or networking, the people said.
H-P, the world's biggest computer maker, is expected to spin off its PC business and is close to a $10 billion deal to acquire U.K. data-analytics firm Autonomy. Dennis Berman has details.
.The Palo Alto, Calif., technology giant has been under investor pressure because of what is seen as its underperforming stock price and there have been investor calls to explore options for its low-margin PC business.
For the fiscal third quarter, H-P reported preliminary earnings of 93 cents a share on revenue of $31.2 billion, compared with a profit of 75 cents a share and $30.7 billion in revenue a year earlier.
But for the fiscal fourth quarter, the company lowered its profit and revenue goals and said it expects to take a large charge to restructure and shut down its webOS business. It also lowered full-year revenue forecasts.
The PC unit was expanded in 2002 following the acquisition of Compaq Computer Corp. First announced almost exactly 10 years ago, the Compaq deal was hugely contentious. A megamerger of two of the biggest names in computers, printers and computing services, it came as both H-P and Compaq were trying to outfox then PC king Dell Inc. Now, H-P is the world's biggest marker of personal computers.
H-P was also in the spotlight after its former Chief Executive Mark Hurd left the company last year amid a scandal, and current CEO Leo Apotheker stepped in.
Mr. Apotheker, a former software executive, has been developing a new strategy for H-P based on technology services and software. The company has twice lowered its profit and revenue forecasts for the current fiscal year.
Autonomy, founded in 1996 and based in the Cambridge, England, makes software that helps companies keep track of their mass of emails, phone calls and documents. It had revenue of $256 million in the second quarter.
Shares of H-P, rebounded on news of the breakup, and were recently down 1.4% to $30.95 in midday U.S. trading amid a broad market selloff.
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