HP / Venture: HP is planning a sweeping overhaul of its businesses, agreeing to a US$10.3b acquisition of Autonomy Corp (enterprise software co), and considering to spin off its PC division which contributes 30% of sales last quarter. HP said it would take 12-18mths to decide what to do with the PC unit.
While the co said it did not intend to dispose of its printer business, part of the strength of that business could be due in large part to the sale of its PCs. Hence outlook for this segment is now becoming more uncertain. Venture counts HP as one of its biggest customers for its Printing & Imaging business. That segment contributed 17% of sales in 2Q11.
Venture mgt gave a positive outlook for 2H11, but would not have been able to factor in the new developments from HP.
Stock trades at 10.4x P/E, 1.1x P/B and offers 7.8% yield at last close at $7.05.
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