Hewlett Packard Enterprise Surges On Move To Merge Services Unit With CSC

Shares of Hewlett Packard Enterprise soared 10% after the company said late Tuesday that it will spin off its enterprise services unit and merge it with CSC . The union will create a "a pure-play, global IT services powerhouse," said HP Enterprise in a statement. CSC Chief Executive Mike Lawrie will become the chairman, president and CEO of the new entity and Meg Whitman will join the board. Once the deal is finalized by March, shareholders of HP Enterprise will own a 50% stake in the newly created company. Separately, Hewlett Packard Enterprise reported second-quarter earnings of $320 million, or 18 cents a share, from $305 million, or 16 cents a share, a year earlier. Year-ago results are calculated as if the company was already independent then. On an adjusted basis, HP Enterprise would have earned 42 cents a share. Revenue grew 1% to $12.7 billion. Analysts surveyed by FactSet had projected earnings of 42 cents a share on revenue of $12.34 billion. For the current quarter, the company projected adjusted EPS of 42 cents to 46 cents. CSC shares surged 23% on the news. [Updated with CSC stock move.]