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HP Reports Small Revenue Gain, Initiates Company Transformation

August 19, 2011
PALO ALTO, CA—August 18, 2011—HP announced financial results for its third fiscal quarter ended July 31, 2011, as well as the commencement of a company transformation and acquisition of Autonomy.

Highlights:

• Third-quarter net revenue of $31.2 billion, up 1 percent from the prior-year quarter and down 2 percent when adjusted for the effects of currency

• Revising full year FY11 revenue estimates to $127.2 billion to $127.6 billion

• Exploring strategic alternatives for Personal Systems Group; shutting down operations for webOS devices and exploring strategic alternatives for webOS software

• Offer to acquire Autonomy, a global leader in infrastructure software for the enterprise, to accelerate expansion in rapidly growing enterprise information management market

HP unveiled the details of a plan to accelerate the business strategy it introduced in March. The plan introduced today will:
  • Move HP into higher value, higher margin growth categories.
  • Sharpen HP’s focus on its strategic priorities of cloud, solutions and software with an emphasis on enterprise, commercial and government markets.
  • Increase investment in innovation to drive differentiation.

As part of the transformation, HP announced that its board of directors has authorized the exploration of strategic alternatives for the company’s Personal Systems Group. HP will consider a broad range of options that may include, among others, a full or partial separation of PSG from HP through a spin-off or other transaction. (See accompanying press release.)

HP will discontinue operations for webOS devices, specifically the TouchPad and webOS phones. The devices have not met internal milestones and financial targets. HP will continue to explore options to optimize the value of webOS software going forward.

In addition, HP announced the terms of a recommended transaction for all of the outstanding shares of Autonomy Corp. plc for £25.50 ($42.11) per share in cash. Autonomy’s software powers a full spectrum of mission-critical enterprise applications. The addition of Autonomy will accelerate HP’s ability to deliver on its strategy to offer cloud-based solutions and software that best addresses the changing needs of businesses.

“We’re focused on improving performance across the business,” said Léo Apotheker, HP president and chief executive officer. “HP is taking bold, transformative steps to position the company as a leader in the evolving information economy. Today’s announced plan will allow HP to drive creation of long-term shareholder value through a focus on fewer fronts, thereby improving its ability to execute, invest in innovation and drive a higher-margin business mix.”
 

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