Hewlett-Packard said on Thursday it is considering a sale or spinoff of its personal computer unit, will halt production of its webOS devices such as the TouchPad, and is in talks to acquire British software firm Autonomy Corp.

At the same time, it reported fiscal third-quarter earnings earlier than expected, and lowered its full-year financial forecasts. The following is immediate reaction from investors and analysts.

BRIAN WHITE, ANALYST, TICONDEROGA SECURITIES

Although results are in-line with our estimates, the company's fourth-quarter outlook is well below our projections and the Street.

Despite weakness in the stock on this announcement, we still advise investors to stay on the sidelines as we believe more bad things could be lurking around the corner.

RAJEEV BAHL, CO-HEAD OF RESEARCH, SOFTWARE & IT SERVICES, MATRIX GROUP

On potential bids for Autonomy:

Would expect both IBM and Oracle to take a good look at Autonomy. For HP it seems a less natural move given their lack of a database or enterprise content platform.

For IBM, Autonomy fits well as a piece of their infrastructure offering alongside Cognos and DB2, for Oracle (an existing Autonomy OEM) it expands their market reach significantly into the unstructured data world.

Autonomy's SPE product (which extends Autonomy's unstructured data capabilities into structured data) would be a hook for both companies.

KIM FORREST, ANALYST, FORT PITT CAPITAL GROUP

None of this should be surprising, in light of what's happening to the consumer with respect to the amount and the type of PCs they're buying and also the fact that even before Leo (Apotheker, the new CEO) took over, the company had been moving more into software and services, specifically targeted at businesses.

You know that consumer PCs is the thing that's dragging that segment down. Because people aren't willing to pay up. They want the sexy iPad. And they may need a cheap PC, but they're not willing to pay up. All consumers seem to have eyes for is the iPad.

On Autonomy: I think it's a move for the future, but I don't think it's going to be a boost to the bottom line immediately.

(Reporting by Alexei Oreskovic in San Francisco, Paul Sandle in London)

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