Hewlett-Packard ends phone business

Hewlett-Packard said today that it is to end its tablet computer and smartphone businesses, and is considering selling its PC business.

The company has been rumoured for six months to have been in talks to spin off or sell its PC business. But the smartphone and tablet announcement was surprising.

HP paid $1.8bn for smartphone maker Palm in 2009, mostly for the webOS software which powered the devices.

Hewlett-Packard, the biggest maker of PCs and printers, has been trying to transform itself to focus more on technology services, much as IBM did a decade ago.

PCs are HP’s biggest revenue generator, but it is the least profitable among the company’s major divisions.

HP is based in Palo Alto, California.

Meanwhile, Hewlett-Packard said its third-quarter net income grew, but it is lowering its revenue forecast for the year.

The company said it earned 93 cents per share, up from 75 cents per share a year earlier. Adjusted earnings were $1.10 dollars per share, a penny above analyst expectations.

HP said its revenue climbed less than 2% to $31.2bn from $30.7bn. This was in line with analysts’ average forecasts, according to FactSet.

For the current quarter, HP is forecasting adjusted earnings below analysts’ expectations. It is also lowering its full-year revenue outlook slightly.