Will The Split Of Hewlett-Packard Increase 'Real' Value For Investors?

Hewlett- Packard (HPQ - Analyst Report) has decided to split into two companies after about a year of consideration.  HP will make the split between its enterprise-facing hardware and service business, and its consumer-facing computer and printer segments with both companies being publicly traded. The business-oriented company will be called Hewlett-Packard Enterprise, and the PC company will be called HP Inc.

HP stated, “Strategic Step Provides Each New Company With the Focus, Financial Resources and Flexibility to Adapt Quickly to Market and Customer Dynamics While Generating Long-Term Value for Shareholders”.

Highlights:

  •  Hewlett-Packard Enterprise will build upon HP's leading position in servers, storage, networking, converged systems, services and software as well as its OpenStack Helion cloud platform
  •  Meg Whitman to be President and Chief Executive Officer of Hewlett-Packard Enterprise; Pat Russo to be Chairman of Hewlett-Packard Enterprise Board
  •  HP Inc. will be the leading personal systems and printing company with a strong roadmap into the most exciting new technologies like 3D printing and new computing experiences
  •  Dion Weisler to be President and Chief Executive Officer of HP Inc.; Meg Whitman to be Chairman of the HP Inc. Board
  •  Company reiterates fiscal 2014 non-GAAP diluted net earnings per share (EPS) outlook of $3.70 to $3.74 and updates GAAP diluted net EPS outlook to $2.60 to $2.64
  •  Company issues fiscal 2015 non-GAAP diluted net EPS outlook of $3.83 to $4.03 and GAAP diluted net EPS outlook of $3.23 to $3.43

Management Structure

Ms. Whitman will still retain most of the power in both companies and will be the chief executive of Hewlett-Packard Enterprise and will serve as nonexecutive chairman of HP Inc. Patricia F. Russo, currently a director of HP, will be chairwoman of Hewlett-Packard Enterprise. Dion Weisler, now head of HP’s printing business, will be president and chief executive of HP Inc.

HP Enterprise

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