HP to Spin Off PC, End Smartphone, Tablet

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Thursday, Aug 18, 2011  |  Updated 1:23 PM PDT
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HP to Spin Off PC, End Smartphone, Tablet

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SAN FRANCISCO - APRIL 28: In this photo illustration, a Palm Pixi smartphone is displayed at a Best Buy store April 28, 2010 in San Francisco, California. Hewlett-Packard announced today that it will acquire struggling smartphone company Palm for $1.4 billion in cash. (Photo Illustration by Justin Sullivan/Getty Images)

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 Hewlett-Packard says its third-quarter net income grew, but the technology giant is lowering its revenue forecast for the year.       

HP reported its earnings before the markets closed Thursday after saying it plans to spin off its PC business and stop selling its webOS tablet and mobile phones.       

Hewlett-Packard Co. said it earned 93 cents per share. That's up from 75 cents per share a year earlier. Adjusted earnings were $1.10 per share, a penny above analyst expectations.

HP says its revenue climbed less than 2 percent to $31.2 billion from $30.7 billion. This matched analysts' average expectations, according to FactSet.       

For the current quarter, HP is forecasting adjusted earnings below analyst expectations. It is also lowering its full-year revenue outlook slightly.

HP has been rumored for six months to have been in talks to spin off or sell its PC business. But the smartphone and tablet announcement was surprising.

HP paid $1.8 billion for smartphone maker Palm in 2009, mostly for the webOS software that powered the devices.       

Hewlett-Packard Co., the biggest maker of PCs and printers, has been trying to transform itself to focus more on technology services, much as IBM Corp. did a decade ago. PCs are HP's biggest
 revenue generator, but it's the least profitable among the company's major divisions.       

HP is based in Palo Alto.
 
 

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