HP says it may sell assets that underperform

The disclosure comes in the wake of a controversial $8.9 billion writedown of the company's Autonomy division

Hewlett-Packard will continue to evaluate potential divestitures of underperforming parts of its business, and the process could get messy, the company warned its investors in its annual 10-K document, which was filed in late December.

"When we decide to sell assets or a business, 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," HP added. "We may also dispose of a business at a price or on terms that are less desirable than we had anticipated."

Bloomberg first reported HP's statement on Tuesday.

In 2011, HP said it was considering a spin-off of its PC division but ultimately decided against such a move.

No specific business units were named in HP's 10-K filing as potentially coming up for sale, but speculation on HP's intentions may center on its Autonomy software business unit, which has been wracked in recent months by alleged accounting improprieties and a US$8.8 billion writedown in value. HP attributed some $5 billion of the writedown to the alleged accounting fraud.

HP has alleged the improprieties occurred prior to its $10.3 billion acquisition of Autonomy in October 2011. Autonomy founder Mike Lynch has strongly denounced HP's claims, even opening a website, AutonomyAccounts.org, to make a counter-case, arguing that HP hasn't provided enough detail about its allegations and the methodology behind the writedown.

However, software revenues have been rising at HP while other categories, including PCs and servers, are seeing sales fall, making a divestiture of Autonomy less likely.

HP is trying to turn its fortunes around overall under the leadership of former eBay CEO Meg Whitman. She succeeded Leo Apotheker who was ousted from the top job after a brief and tumultuous run. Apotheker, who engineered the Autonomy acquisition and had proposed the PC division spinoff, has also denied any knowledge of accounting misdeeds.

The U.S. Department of Justice has begun an investigation of the Autonomy deal, according to HP.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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Tags business issuesservicessoftwareHewlett-Packardfinancial resultshardware systemsrestructuringAutonomy

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