HP Needs to Find Itself
NEW YORK (TheStreet) -- As predicted, HP(HPQ) felt the effects of a tough macro economy when it reported its latest quarterly resultson Wednesday. The Dow component, however, still needs to get its own house in order.
Weighed down by declining PC and printer sales, HP missed analysts' top-line estimate. While there was no great surprise here following rival Dell's(DELL) underwhelming second-quarter numbers this week, the results have once again thrust a spotlight on HP's PC business.
Nonetheless, there are still calls for her to rethink HP's PC strategy, particularly after the division's listless third-quarter performance.
"In our view, HP should focus on the cloud and part ways with its PC business that we expect will be increasingly dominated by Asian competitors," explained Topeka Capital Markets analyst Brian White, in a note released on Wednesday.
A PC spinoff would certainly be a bold move for HP, but it would not be the first tech heavyweight to take such drastic action. Rival IBM(IBM) , for example, sold its PC business to Lenovo back in 2004, laying the foundation for a headlong push into more lucrative areas such as data analytics and cloud computing.
Whitman, though, can point to the fact that the company's Personal Systems Group (PSG) accounts for almost a third of total revenue and, within enterprises, serves as a vital 'foot in the door', to sell additional technology.
Nonetheless, more weak quarters from PSG will only increase the pressure on Whitman to carve off the vast PC business.
Software, Cloud, Security