Packin’ it in
Hewlett-Packard announced its Q3 results Thursday afternoon, along with news that it is looking to purchase Autonomy (AUTN) and that it is planning to pull the plug on a number of business lines. Recurring earnings came in at $1.10 per share, in line with consensus, as revenue improved to $31.2 billion.
Management guided Q4 earnings to $1.12-1.16 per share on revenue of $32.1-32.5 billion, short of the $1.31-per-share on $33.996 billion analysts were looking for. However, the bigger news for investors was management’s plans to overhaul the company. First, the company indicated that it was looking to purchase Autonomy Corp, the second largest UK software maker, for £28.50 per share (approximately $42.11) in what would be the company’s third-largest purchase. The company also announced plans to kill several of its WebOS devices, including the TouchPad tablet that failed to compete against other tablet offerings.
The company did, however, indicate it would continue production of WebOS software. Additionally, management indicated it is looking to spin off its PC business in an effort to re-align the companies focus on more profitable avenues. Many analysts compared the announcements to IBM’s (IBM) transition over the past decade, where Big Blue has taken itself out of the PC industry.
Hewlett-Packard (HPQ: NYSE: US$29.51), Net Change: -1.88, % Change: -5.99%, Volume: 93,546,830