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HP May Sell Units Not Meeting Targets

By - Source: Bloomberg | B 22 comments

HP could dump its PC and printer businesses if they're not meeting goals.

Bloomberg has zeroed in on a comment made by Hewlett-Packard within its December 27 10-K filing with the U.S. Securities and Exchange Commission. According to the filing, the company plans to "evaluate the potential disposition of assets and businesses that may no longer help us meet our objectives." In other words, units of HP that aren't meeting targets could be dumped.

In the "Risk Factors" section of its regulatory filing, HP said that any disposal of an asset or business would have possible setbacks. "When we decide to sell, we may encounter difficulty in finding buyers or alternative exit strategies on acceptable terms in a timely manner, which could delay the achievement of our strategic objectives," the company said.

HP CEO Meg Whitman has been working to steer the company back in the right direction after five straight quarters of declining sales and "years of botched deals, management tumult and strategic missteps". The $8.8 billion writedown of Autonomy Corp. back in November also hasn't helped propel the company forward, pushing it into considering the sale of specific branches to bring value back to its stock.

"[The Company] may dispose of a business at a price or on terms that are less desirable than we had anticipated," HP said in the filing. "The impact of the divestiture on our revenue growth may be larger than projected."

The first arm supposedly on the chopping block is HP's Printing and Personal Systems Group. This was formed in March 2012 by combining the Imaging and Printing Group (IPG) and its Personal Systems Group (PSG). Headed by Todd Bradley, the executive vice president of PSG since 2005, this merging of two units was expected to drive profitable growth.

But according to Bloomberg, the company's PC business earned $35.7 billion in sales in fiscal 2012, or 29-percent of HP's overall sales. The printer business only earned $24.5 billion during fiscal 2012, or 20-percent of the company's total sales. Even more, HP shares declined a whopping 45-percent in 2012 although they gained 4.2-percent to $14.25 at yesterday’s close in New York.

Also in the December 27 filing, HP said that the U.S. Justice Department had opened an investigation into Autonomy. HP said that the software company misrepresented its overall performance before HP's acquisition in 2011.

 

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  • 10 Hide
    InvalidError , January 3, 2013 2:40 PM
    People are losing interest in HP's overpriced and DRM-infested ink/toner cartridges?

    I'm just glad my LaserJet is from the pre-DRM era. Poke a hole in the cartridge side, fill with toner, good for another ~1500 pages, rinse and repeat until the drum wears out or the heating wire breaks.
Other Comments
  • 10 Hide
    InvalidError , January 3, 2013 2:40 PM
    People are losing interest in HP's overpriced and DRM-infested ink/toner cartridges?

    I'm just glad my LaserJet is from the pre-DRM era. Poke a hole in the cartridge side, fill with toner, good for another ~1500 pages, rinse and repeat until the drum wears out or the heating wire breaks.
  • 1 Hide
    dgingeri , January 3, 2013 2:54 PM
    I really, really, really, really, really, really, really, really, really, really, really, really, really, really hope they mean their HP-UX and Itanium units.
  • 0 Hide
    socialfox , January 3, 2013 2:57 PM
    InvalidErrorPeople are losing interest in HP's overpriced and DRM-infested ink/toner cartridges?I'm just glad my LaserJet is from the pre-DRM era. Poke a hole in the cartridge side, fill with toner, good for another ~1500 pages, rinse and repeat until the drum wears out or the heating wire breaks.


    Agreed, the ink cartridges for replacing all the colour and black in my HP B210 is more than what I bought the printer for, which came with the ink cartridges already included. Now a days, I just buy a new printer from HP rather than spending more money on the Ink Cartridges alone.
  • 3 Hide
    booyaah , January 3, 2013 3:36 PM
    I was at an IT convention recently and there was a contest with a small door prize for the winner.

    Q: How much would it cost to fill a car with an empty 20 gallon gas tank to full with HP color ink?

    A: ~$8,000,000

    No one even came close out of 50 ppl...I think someone did say a million though lol.
  • 1 Hide
    Anonymous , January 3, 2013 3:36 PM
    Lets see PC's that come loaded with bloatware and printers with bad software and expensive cartridges. Who wouldn't want HP products
  • 0 Hide
    ipwn3r456 , January 3, 2013 4:03 PM
    HP needs to join the mobile market already. Without that, they aren't going to survive with the PC market...
  • -2 Hide
    AzureFlash , January 3, 2013 4:03 PM
    HP, please collapse in a giant pile of awful fail already. I have been horrifically scarred for life whenever I've had to work with HP hardware. They are literally manufacturers of fecal matter.
  • 1 Hide
    SirGCal , January 3, 2013 4:06 PM
    socialfoxAgreed, the ink cartridges for replacing all the colour and black in my HP B210 is more than what I bought the printer for, which came with the ink cartridges already included. Now a days, I just buy a new printer from HP rather than spending more money on the Ink Cartridges alone.


    There's your problem... switch companies and stop buying from HP. As long as we keep supporting their 'disposable' printer system, they'll keep doing it. Problem is there aren't a whole lot 'better' out there... Canon, Epson, etc. perhaps...
  • 0 Hide
    InvalidError , January 3, 2013 4:37 PM
    SirGCalProblem is there aren't a whole lot 'better' out there... Canon, Epson, etc. perhaps...

    Most of the major brands are DRM-infested or at least were at some point. I know for sure Epson was among the first since my first (and only) color printer was a DRM-infested Epson over 10 years ago. Thankfully, there was a "jailbreak" for it that disabled counters checks on the printer and allowed resetting counters on cartridges. Unfortunately, due to using it somewhat sparingly, it didn't take very long for the head to clog and render the whole printer useless.
  • 0 Hide
    SirGCal , January 3, 2013 4:43 PM
    Ya, so far there's always been a resetting tool for the Epson, at least for photo printers. So they are good till the jet is junk. Why it's not a user-replacable part blows my @#$%ing mind... I actually just bought a new one looking for a very serviceable unit regardless of the price, and they were nowhere to be found, for any price.
  • 0 Hide
    dgingeri , January 3, 2013 4:52 PM
    In my attempts at buying color inkjet printers, I have been through all of the major brands. Canon has the absolute worst drivers. Epson has cartridges pretty much as expensive as HP. The two Lexmark printers I bought for $30 each managed to give me one printed page each, the test page, before the cartridges dried out. The HP I have now is pretty easy on the ink costs, at $10 per color cartridge and $14 for black, but it has 5 color cartridges, however, it needs to have the print head replaced about every 2 years. That's mostly what you're paying for on HP cartridges, the print head, not the ink. I'll stick with HP for my color printing. It's cheaper in the end. For black and white, I like my Samsung laser printer.
  • 1 Hide
    Onus , January 3, 2013 4:53 PM
    HP used to make THE BEST laser printers you could buy; "tanks" that printed, and printed, and printed. Now, HP has forgotten they are a printer company first, and we see the results: junk. Their "Universal Drivers" are a universal failure. People have caught on to their absurd consumables pricing, so that cash cow is headed out to pasture. I've got an old (but lightly used) multifunction HP 5610v that's still going strong, but when it finally dies, I won't be getting another HP.
  • 0 Hide
    soccerplayer88 , January 3, 2013 5:37 PM
    socialfoxAgreed, the ink cartridges for replacing all the colour and black in my HP B210 is more than what I bought the printer for, which came with the ink cartridges already included. Now a days, I just buy a new printer from HP rather than spending more money on the Ink Cartridges alone.


    Your problem is that your buying ink. Inkjets across the board are notoriously expensive. Because, you guessed it, ink jet printing. Set some money on the side and go out and buy a decent printer, instead of one you saw on sale in a Staples ad for $100.

    The only way you'll get a decent printing/copying costs setup is through a toner based systems.
  • 0 Hide
    samwelaye , January 3, 2013 7:02 PM
    socialfoxAgreed, the ink cartridges for replacing all the colour and black in my HP B210 is more than what I bought the printer for, which came with the ink cartridges already included. Now a days, I just buy a new printer from HP rather than spending more money on the Ink Cartridges alone.


    ebay.com: search hp w/e ink. buy cartridges for 3$ from china.
    to be honest though, not sure if this works with HP cartridges. Do it with an older epson, which is pathetic because the ~2$ cartridge on ebay actually prints MORE pages than the official $30 cartridge... Also do the same with a brother printer (LC79 cartridge, 12$ for 2 blacks and a set of colors on ebay, 140 for the equivalent genuine cartridges). they all last just as long
  • 0 Hide
    InvalidError , January 3, 2013 8:25 PM
    soccerplayer88The only way you'll get a decent printing/copying costs setup is through a toner based systems.

    The biggest benefit from going laser: toner is dry, practically infinite shelf life under reasonable storage conditions, so you always get close to 100% toner use, regardless of whether you spend the cartridge over a month or over multiple years.

    With inkjets, you end up wasting half the cartridge on head cleaning if you don't use it often enough to prevent clotting... so it gets expensive regardless of whether you print a little or a lot. The stupid Epson printer I had systematically head-cleaned on power-up and again before printing if it was idle for more than 10 or so minutes.

    The most insulting thing about some inkjet printers is that some models even have a cleaning tank overflow beep/LED code... you'd need to dump the integral wet content of multiple fresh cartridge to fill that tank. I have a hard time believing some people may scrap that much ink so fast (fast enough that the tank does not have time to dry) before giving up on the printer.
  • 0 Hide
    Shin-san , January 3, 2013 10:04 PM
    My HP printer is actually decent. However, I'm not surprised that their PC division is having problems. I know many people who have had problems with HP laptops. Either the batteries start losing their charge capacity, or the fans on them get to be really loud.

    Okay, sometimes it's the low-end laptop, but what gives you the incentive to get a high-end one?
  • 0 Hide
    Camikazi , January 3, 2013 11:07 PM
    soccerplayer88Your problem is that your buying ink. Inkjets across the board are notoriously expensive. Because, you guessed it, ink jet printing. Set some money on the side and go out and buy a decent printer, instead of one you saw on sale in a Staples ad for $100.The only way you'll get a decent printing/copying costs setup is through a toner based systems.

    I just use a CISS, $17 for 100ml of all 6 colors (equivalent to 12 cartridges of each color or about $890 worth) for my printer and it works perfectly.
  • 2 Hide
    cd000 , January 3, 2013 11:24 PM
    "But according to Bloomberg, the company's PC business earned $35.7 billion in sales in fiscal 2012, or 29-percent of HP's overall sales. The printer business only earned $24.5 billion during fiscal 2012, or 20-percent of the company's total sales."

    So these two groups produce 49% of HP's sales, to the tune of over 60 billion dollars, with no mention of them costing HP any money, yet they are the ones being considered for elimination?

    Am I missing something, or is this as stupid as it seems?
  • 0 Hide
    beayn , January 4, 2013 12:44 AM
    I am happy to have kept my old HP Deskjet 840c. The cartridges are still $40 or so, but they don't dry out, and the printer doesn't have a stupid cleaning cycle that wastes ink constantly. It always prints first try without any problems no matter how long I went without using it (sometimes weeks to months). One cartridge tends to last me several years. It's not the best color printer so I never replaced the color cartridge in it, but for B&W, it does great.

    I think it's from the HP era of decent printers long before the "disposable" business model of today.


  • 1 Hide
    beayn , January 4, 2013 12:58 AM
    booyaahI was at an IT convention recently and there was a contest with a small door prize for the winner. Q: How much would it cost to fill a car with an empty 20 gallon gas tank to full with HP color ink?A: ~$8,000,000No one even came close out of 50 ppl...I think someone did say a million though lol.

    At $50 for 20ml, it comes out to $189,000 for 20 gallons. Even if it were 10ml per cartridge, it's still under 400k for 20 gallons. I'm not sure where 8 million comes from.

    $50 x 50 = $2500 per liter. 3.79 liters in a gallon = 75.8 liters in 20 gallons = $189,500

    Now that's not saying ink isn't one of THE most expensive substances... but it's not $8 million either.
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