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Hewlett-Packard Says It May Dispose of Units Not Meeting Targets

Hewlett-Packard Co. (HPQ) said it’s evaluating the disposition of businesses that don’t meet goals more than a year after Chief Executive Officer Meg Whitman said she didn’t 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,” Hewlett-Packard said in a Dec. 27 10-K filing with the U.S. Securities and Exchange Commission. That language wasn’t included in the document a year earlier.

CEO since September 2011, Whitman is working to turn around Palo Alto, California-based Hewlett-Packard after five straight quarters of declining sales and years of botched deals, management tumult and strategic missteps. An $8.8 billion writedown of the acquired software company Autonomy Corp. in November renewed calls on Wall Street for Hewlett-Packard to realize shareholder value by shedding certain businesses, such as PCs and printers.

Hewlett-Packard, the world’s largest maker of personal computers and printers, discussed the evaluation in the “Risk Factors” section of its regulatory filing, saying 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,” Hewlett- Packard said.

Photographer: Kim White/Bloomberg

Hewlett-Packard said it’s evaluating the possible disposition of businesses that don’t meet goals. Close

Hewlett-Packard said it’s evaluating the possible disposition of businesses that don’t meet goals.

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Photographer: Kim White/Bloomberg

Hewlett-Packard said it’s evaluating the possible disposition of businesses that don’t meet goals.

Justice Investigation

Hewlett-Packard also said in the filing that the U.S. Justice Department had opened an investigation relating to Autonomy. Hewlett-Packard accused the software company of misrepresenting its performance before being bought in 2011.

The disclosure that Hewlett-Packard is evaluating disposing of assets or businesses came 14 months after Whitman said she would keep the company’s PC business in house. Her predecessor, Leo Apotheker, had explored a spinoff of the unit, which had $35.7 billion in sales in fiscal 2012, or 29 percent of the total.

Whitman instead unified the PC and printer groups’ management under Executive Vice President Todd Bradley last year. The printer unit accounted for $24.5 billion in fiscal 2012 revenue, or 20 percent of total sales.

Michael Thacker, a spokesman for Hewlett-Packard, declined to comment beyond the filing.

Hewlett-Packard’s filing said it may “dispose of a business at a price or on terms that are less desirable than we had anticipated.” In addition, “the impact of the divestiture on our revenue growth may be larger than projected,” according to the filing.

Shares of Hewlett-Packard gained 4.2 percent to $14.25 at yesterday’s close in New York. The shares declined 45 percent in 2012.

To contact the reporter on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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