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To: Captain Jack who wrote (50973)	3/2/1999 9:19:00 AM
From: Elwood P. Dowd	Respond to of 97611

Hewlett-Packard To Announce Restructuring - Report By Eric Auchard NEW YORK (Reuters) - Hewlett-Packard Co. (NYSE:HWP - news), one of the computer industry's most diversified companies and the fabled firm around which Silicon Valley formed, reportedly will detail plans later Tuesday to split into at least two separate publicly-traded companies. The Wall Street Journal reported Tuesday that H-P is expected to make an announcement after the close of trading today. Hewlett stock traded $3 higher in London at $68.87, while in New York Monday, the shares closed down 56 cents at $65.87. The Palo Alto, Calif. company has been struggling in recent years with sluggish growth and a seeming inability to unlock the potential value of its mix of computing and more traditional scientific instrument businesses. Criticism of H-P ranges widely, from views the company's corporate culture is too inward looking to keep up with Silicon Valley's entrepreneurs, to opinions the company's growth has been hurt by the economic downturn in Asia. ''It takes them so long to right the ship, by the time they get it in the right direction, the direction has moved,'' one critic said recently. Talk of restructuring has centered in recent months on the possibility that it might spin off its test and measurements business, which accounts for about 14 percent of revenues. But H-P also has telegraphed that it soon plans to unveil a bold effort to capture a share of the next phase of Internet growth and help shake off its anemic growth. According to the paper, the split-up would occur as part of a restructuring aimed at jump-starting the company's growth. Its growth topped 20 percent a year in the first half of the 1990s on the success of high-volume businesses such as personal computer printers, a business it still dominates. But Hewlett revenues rose only 1 percent to $11.9 billion during its most recent quarter compared with the same quarter of last year. And now, H-P, the computer industry's No. 2 company in revenues, is lagging the financial performance of competitors like International Business Machines Corp. (NYSE:IBM - news), Compaq Computer Corp. (NYSE:CPQ - news) and Sun Microsystems Inc. (Nasdaq:SUNW - news) . Over the years, the company has expanded into a range of computer products, including powerful computer servers used to run telecommunication companies and banks. Its fast-growing line of personal computers has gained market share but at the expense of profits as industry pricing has tumbled. In 1997, it acquired Verifone, the world's leading supplier of credit card transaction terminals, giving it a leg-up in the emerging world of electronic commerce. Regarding the Internet, Hewlett-Packard executives see a second phase of development now underway that will center on delivering services to millions of online employees and consumers. H-P is positioning itself to supply a range of business services to allow companies to conduct electronic commerce, they say. Late last year, the company hired management consultancy McKinsey & Co to help it cope with the on-going identity crisis and weigh strategic alternatives for its businesses, fueling speculation that a divestiture could be in the works.