Hewlett-Packard May Spin Off PC Business To Focus On Cloud Computing
Hewlett-Packard Co (HPQ.N), which may spin off the world’s largest PC business, is no longer a “safe haven” stock, said Robert W. Baird, which downgraded the stock to “neutral” on weak results and the company’s decision to overhaul its portfolio.
As part of a series of moves away from the consumer market, the iconic company associated with the birth of Silicon Valley plans to kill its new tablet and buy British software company Autonomy Corp (AUTN.L) for $11.7 billion.
“We are directionally positive on the shift to high-growth, high-margin business but this transformation is proving expensive, protracted and includes significant integration risk,” analysts, including Jayson Noland, wrote in a note to clients.
In the second quarter, HP cut its profit forecast for the year, saying it needs to focus on consulting, cloud computing and higher-margin businesses and move away from less-profitable endeavors like maintenance.