Hewlett-Packard weighs disposal of businesses that don't meet goals

Revelation comes 14 months after chief executive rules out spin-off of PC unit

PUBLISHED : Wednesday, 02 January, 2013, 12:00am
UPDATED : Wednesday, 02 January, 2013, 4:24am

Hewlett-Packard said it is evaluating the disposal of businesses that do not meet goals more than a year after chief executive Meg Whitman said she did not plan to spin off the personal-computer division.

"We also continue to evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives," HP said in a filing last month with the US Securities and Exchange Commission. That language was not included in the document a year earlier.

Chief executive since September 2011, Whitman is working to turn around HP after five consecutive quarters of declining sales and years of botched deals, management tumult and strategic missteps. An US$8.8 billion write-down of the acquired software company Autonomy in November renewed calls on Wall Street for HP to realise shareholder value by shedding certain businesses, such as PCs and printers.

HP, the world's largest maker of PCs and printers, said in the filing that any disposal would have possible drawbacks.

"When we decide to sell assets or a business, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives," HP said.

HP also said in the filing that the US Department of Justice had opened an investigation relating to Autonomy. HP accused the software company of misrepresenting its performance before being bought in 2011.

The disclosure on disposal evaluation came 14 months after Whitman said she would keep the company's PC business in house. Her predecessor, Leo Apotheker, had explored a spin-off of the unit, which had US$35.7 billion in sales in fiscal 2012, or 29 per cent of the total.