Hewlett-Packard to become two separate companies

<p>HP is set to separate its computer and printer business from its corporate hardware and services operations.</p>

Hewlett-Packard has announced that it will be splitting into two separate companies.

The technology firm, known as HP, confirmed that it will be transforming its better-performing computer and printer business and its corporate hardware and services operations into two different entities. It continues the company's restructuring programme which has resulted in a raft of job losses over the past few years.

Earlier in the year, HP reported a drop in profits despite rising computer sales. The company recorded a $985 million (£593 million) profit for the three months to the end of July. While it saw a 12 per cent rise in personal computer sales it was not enough to match the $1.39 billion profits recorded 12 months earlier.

The Wall Street Journal reported that the split plans will allow HP to focus its attentions on its faster-growing businesses. The company has already conceded that while PCs were "coming back" it was still a "declining business". The rise of mobile devices such as smartphones, tablets and laptops has impacted on the popularity of PCs.

HP's decision to split its operations represents a major reshape of the day-to-day business of the technology giant. It boasts a workforce of around 300,000 employees, of which its printing and personal computing business accounts for half of its revenue and profit, according to the company's latest financial results.

As technology has moved forward in recent years, HP has struggled to adapt with the company falling behind the likes of Apple and Microsoft. The company has a market value of $66 billion which is significantly bettered by Apple's $596 billion and Microsoft's $380 billion.

Chinese computer maker Lenovo has also recently overtaken HP as the company is now ranked as the number one business in terms of shipments.

Find up to date information on the FTSE 100 and spread betting strategies at City Index.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.