HP plans PC spinoff, eyes Autonomy

NEW YORK/SAN FRANCISCO/LONDON: Hewlett-Packard Co is in talks to buy British software company Autonomy and is pondering options for its personal computing division including a spinoff, as the tech giant steps up an overhaul aimed at rekindling growth.

HP, a storied Silicon Valley icon that dominates the personal computing industry, announced it will discontinue the WebOS-based "TouchPad" tablet computer and phones, which have failed to catch on with consumers.

The news coincided with HP's earnings report, which the company released earlier than expected on Thursday. It said fiscal third-quarter revenue rose to $31.2 billion from $30.7 billion a year ago, in line with Wall Street expectations.

Shares of HP had climbed briefly into positive territory on a Bloomberg report about the moves, as Wall Street cheered its bold foray into the high-margin software arena and the hiving-off of a struggling personal computing unit.

But they backtracked ahead of HP's earnings, declining 3 percent to $30.45 before they were briefly suspended from trade. The stock was off 6 percent at $29.51 late Thursday afternoon.

HP CEO Leo Apotheker, a former chief of European software giant SAP AG, had been expected to drive an expansion of the company's relatively small but very profitable software division -- including through major acquisitions.

Copyright Reuters, 2011