HP to spin-off PCs and printers, according to reports

HP's profitable printers and unprofitable PCs could be floated off as the company focuses on business

Speculation is mounting that systems giant HP is planning to separate out its PC and printer businesses into a new unit, ahead of a full-scale spin-off.

Such a move, which the Wall Street Journal speculates will be announced today, would see the rump of HP focused on enterprise software, high-end servers and other corporate hardware, as well as services.

It would also mark a u-turn from the decision Meg Whitman took when she became CEO three years ago to ditch such a proposal that had been put forward by her predecessor Leo Apotheker - she did, however, continue with his ill-fated plan to acquire Autonomy for $11bn at the same time, with disastrous consequences.

HP's printer business is markedly more profitable than its PC business. But even the printer market is under pressure from re-fill businesses, which can provide printer ink at vastly lower prices than big brands like HP. This pressure has been reflected in subscription plans introduced by HP enabling people to buy "official" cartridges more cheaply.

Each side of the business would turnover roughly the same amount, with PCs and printers producing revenues of $55.9bn in HP's last financial year, and rump HP - enterprise computing, services and software divisions - a combined $55.7bn.

HP is expected to post revenues of around $112bn in its current financial year and employs some 300,000 staff - despite repeated rounds of cost- and staff-cutting. However, many of its biggest acquisitions have either been ill-timed, over-valued, or both and the company's value compares poorly with rivals such as Microsoft and Apple.

Indeed, HP is currently valued at just $66bn compared to Apple's $596bn and Microsoft's $380bn. Even IBM, HP's closest comparable rival, which sold off its PC business in 2005 to Lenovo and followed that up by selling its low-end servers to the same company this year, is valued at just under $190bn, despite posting lower revenues.

HP has neither confirmed nor denied the rumours.