HP CEO Says Split Effective From November 1

HP CEO Says Split Effective From November 1
Hewlett-Packard Chief Executive Meg Whitman said the separation of HP Inc and Hewlett-Packard Enterprise would be effective on November 1.

Whitman made the announcement during the company's technology event, HP Discover 2015, in Las Vegas on Tuesday.

The world's No. 2 personal computer maker said in October it would split into two listed companies, separating its computer and printer businesses from its faster-growing corporate hardware and services operations.

In late-May, HP forecast separation-related costs below the expectation of several analysts and reported a better-than-expected quarterly profit.

The 75-year-old company said it expects $400 million-$450 million of costs from the planned separation of its computer and printer businesses from its faster-growing corporate hardware and service operations.

On a conference call, the company said it sees potentially $2 billion in restructuring costs in its Enterprise Services group over three years. The company added it may reduce costs at the two companies by about $1 billion during the same period.

"I thought it could be a little higher than that," FBN Securities analyst Shebly Seyrafi said. There was some excitement about the costs being less than expected, he said.

The forecast soothed investor concerns about costs for the breakup in the first year, Cross Research analyst Shannon Cross said.

Ongoing cost reductions and HP's focus on higher-margin sales were driving profit, Cross said. Total costs and expenses fell 5.7 percent to $24 billion in the second quarter ended April 30.

"I think the Street was expecting higher expenses," Seyrafi said.

Edited by NDTV staff from original story by Reuters

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