This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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.

Problematic PCs

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.

Last year HP's controversial former CEO Leo Apotheker mulled a possible spinoff of the company's PC business; although his replacement, Meg Whitman, ultimately nixed the plan.

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.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs