HP said to be eyeing Aruba Networks for infrastructure buy

HP's new enterprise IT spinoff could be strengthened with the acquisition of Aruba Networks.
Written by Rachel King, Contributor

Even as the company prepares to split in half amid a multi-year recovery plan, that apparently doesn't seem to be stopping Hewlett-Packard from shopping around.

The tech giant is said to be in talks to acquire networking vendor Aruba Networks, according to Bloomberg Businessweek on Wednesday.

Such a purchase of Aruba's Wi-Fi infrastructure could greatly strengthen one of the two brands forthcoming from the HP split.

HP confirmed last October it would be dividing into two companies: one focusing on enterprise IT with the other on PCs and printers.

The company followed up with a more detailed leadership structure for each half in January.

However, based on the report, things appear to be far from a done deal.

HP itself has a long way to go in balancing the books, demonstrated by its mixed first quarter earnings report published on Tuesday.

Non-GAAP earnings were 92 cents per share on a revenue of $26.8 billion, down five percent year-over-year.

Wall Street was looking for earnings of 91 cents per share with $27.34 billion in revenue.

The Enterprise Group spanning servers, storage and networking solutions maintained a flat revenue rate year-over-year, while Enterprise Services for IT and outsourcing saw its revenue drop 11 percent during the quarter.

Despite the revenue slip and miss on the analyst target, CEO Meg Whitman once again insisted that "the HP turnaround remains on track."

On the flip side, the rumored merger appears to be favoring Aruba's stock as shares soared by 21 percent in after-hours trading.

Editorial standards