HP drops profit bombshell, fires execs (Carly Fiorina is the one who should go, imo)

Mercury News ^ | 8/13/04 | Dean Takahashi

[NormsRevenge]

Hewlett-Packard shocked Wall Street Thursday by announcing disappointing sales and profits even as some of its top competitors are thriving.

HP Chief Executive Carly Fiorina blamed a series of internal missteps for the shortfall, which she called ``unacceptable.'' She immediately fired three top executives. But some analysts said the poor performance reflected deeper problems raised by HP's $19 billion purchase of Compaq Computer two years ago.

In a conference call with investors, Fiorina said, ``Execution issues cost us and therefore we are making immediate management changes.''

The financial bombshell came a week before the company was scheduled to release its earnings report. HP's stock tumbled 13 percent in response, taking $7.8 billion off the company's market value.

Already battered by warnings from Intel, Cisco and National Semiconductor, the Nasdaq fell to its lowest level in a year. Larger economic concerns related to rising interest rates, terrorism worries and high oil prices also are putting a damper on markets.

Underscoring HP's troubles was good news from rivals Dell and IBM on Thursday. Dell announced a 29 percent jump in profits, while IBM said it expects to hire 18,800 new employees this year.

[NormsRevenge]

And Fiorina's on the Gub's Economic Recovery Team :-\

[DB]

Carly Fiorina destroyed an American icon.

[skip_intro]

Who says a medieval history major can't drive a tech company into the ground? And what kind of name is Carleton for a woman?

[GSlob]

An old Japanese practice of the head honcho (Fiorina in this case) standing up, tearfully and profusely apologizing and then committing seppuku on the spot would be VERY refreshing.

[KC_Conspirator]

Fiorina was hired to save the company and turned it into Hewlett-Patel. So now after all the shipping of US jobs overseas the comapny is still failing? Hmmm....

[RightWhale]

HP stock rises .42 on small volume.

[Diogenesis]

You got that right. HP was THE best,
where "was" is the key word.

[babygene]

This company sure is going to hell in a hand basket since I retired... (Of course I retired because Carly Fiorina came aboard)

[TXBSAFH]

I worked for HP for a while int 2002 and 2003. I quit one step ahead of the outsourcing. I saw the hand writting on the wall then. They let go alot of good experienced people for cheap labor in asia. You get what you pay for.

[carl in alaska]

HP has become a wimpy politically correct SF Bay company. They picked a fight with Dell and they got beat up by Michael Dell and his army of tough Texans. I expect Dell to continue to demolish HP because Mr. Dell is a much better manager and leader than Ms. Fiorina.

[Steely Tom]

HP Chief Executive Carly Fiorina blamed a series of internal missteps for the shortfall...

As opposed to "external missteps?"

This sentence just caught my eye.

Imagine if she had "blamed it on a series of missteps," leaving out the word "internal." Stated in this way, the sentence would clearly have indicated that the missteps were hers, and there would have been only one possible next sentence: "...therefore I am today tendering my resignation to clear the way for someone else to come in and try to put right a great name of American technology."

But no. The missteps were "internal." And we're firing three other shlubs whose names are other than Carly Fiorina.

(steely)

[Hacksaw]

I believe she made some sneering comment a while back regarding outsourcing. It something to the effect of "Americans don't have the right to a job".

[Who dat?]

Who says a medieval history major can't drive a tech company into the ground?

Ha.

The only thing I can think of offhand that I have that is an HP product is my HP-48GX calculator. I used to use it all the time. It’s excellent but you don’t run around buying graphing calculators every year (or even every decade).

[bankwalker]

It something to the effect of "Americans don't have the right to a job".

Well, according to the constitution of the U.S.A., they don't.

[wesdale]

There are alot of HP employees in Texas also. Mostly in Houston. This article is part truth and part exaggeration. The facts are:

• Third quarter revenue of $18.9 billion, up 9% year-over-year
• Non-GAAP operating profit of $846 million; Non-GAAP EPS $0.24
• GAAP operating profit of $657 million; GAAP EPS $0.19
• Revenue in Personal Systems grew 19% year-over-year; Imaging & Printing grew 8%; Enterprise Servers and Storage was down 5%; HP Services grew 12%; Software grew 17%

The only disappointment was the enterprise number. HP actually beat Dell in desktop PCs: nearly doubling Dell's revenue growth this past quarter while maintaining profitability. The sky is not falling.

[kms61]

My company bought a bunch of HP equipment a couple of years ago. Big mistake IMHO. After having to deal with that unreliable crap I'll never spend a nickel on any HP product.

[Revolting cat!]

What's HP? Oh, it's that printer ink company. They oughta diversify!

[GOP_1900AD]

Word on the street is, they've had some severe supply chain issues. Managing CMs in the PRC can be a challenge.

[Hacksaw]

Well, according to the constitution of the U.S.A., they don't.

Interesting, but she was not discussing a constitutional issue - rather she was defending sending jobs out to foreigners. It's not quite the best face to put on it, especially when you are trying to sell your product to Americans.

[bankwalker]

It's not quite the best face to put on it, especially when you are trying to sell your product to Americans.

I think her duty is to the shareholders. Let's see if they can her or not.

[GOP_1900AD]

Problem is, when you screw up on the big iron side of the biz, you get burned big time. The inventory alone can kill. When I see "execution issues" that is coded language for one or a combination of the following: stop ship, purge, line fall out, supplier failure to deliver subtier parts, fulfillment planning mistakes.

[Eric in the Ozarks]

Maybe he should phone it in from India.
'swhy I bought a Dell.

[chimera]

I believe she made some sneering comment a while back regarding outsourcing. It something to the effect of "Americans don't have the right to a job".

But Carly did create a job because she advertised for hiring someone to be a stewardess on her private jet. Never mind all those engineering and R&D jobs she outsourced to Malaysia. Those were only for Ph.D.-types who'd worked all their lives to build their careers. Better to be a stewardess.

Carly's becoming a bit of a legend, moving from company to company in the tech world and running them into the ground. Isn't she the one who dunked Lucent?

[Poohbah]

I believe she made some sneering comment a while back regarding outsourcing. It something to the effect of "Americans don't have the right to a job".

Generally, I think she's an idiot. But she's dead right on this one.

[Hacksaw]

Generally, I think she's an idiot. But she's dead right on this one.

Again, this misses the point. It was an extremely stupid thing to say in response to outsourcing, especially when Americans are your largest market.

[Publius6961]

The Compaq debacle can't be overemphasized. Another holdout of the "proprietary" approach to competition. Make the product "non-standard" and it's a certain road to being marginalized.

[Boundless]

> And what kind of name is Carleton for a woman?

A name given by parents who wanted a son?

[eno_]

Dell also knows exactly what they are and are not:
Dell is NOT a technology company. Dell is the best channel for Intel and Microsoft, which ARE technology companies that don't want to run their own channel.

HP dosn't know what it wants to be.

Oh, and what a surprise that Carla Vampira Fiorina, who jump off the Lucent disaster at just the right career management moment, would not be good for the health of HP. Gee, who didn't see THAT train wreck coming.

[eno_]

Isn't she the one who dunked Lucent?

The Lucent disaster was a team effort. Fiorina just was 1 IQ point ahead of her PHB colleagues and knew when to jump.

[pointsal]

I own one of Carly's dud computers....
HP has become junk merchandise, in my opinion.
Tech support is sing/song from jabber.....
Better buy the product insurance because it may come in handy when the machine goes bonkers.

[Age of Reason]

My company bought a bunch of HP equipment a couple of years ago. Big mistake IMHO. After having to deal with that unreliable crap I'll never spend a nickel on any HP product.

Ever since my experience (and the experience of countless others) with their 5L printer, I never bought a thing made by HP again.

What a stupid piece of junk that was.

[Poohbah]

Again, this misses the point. It was an extremely stupid thing to say in response to outsourcing, especially when Americans are your largest market.

It's a hell of a lot more honest than biting her lip and saying "I feel yore pane."

[eno_]

What's HP? Oh, it's that printer ink company. They oughta diversify!

First, they ought to be forced to turn over the HP name to all the test gear and medical equipment they spun out (What IS that called now, anyway?) That is the true HP heritage.

[gonewt]

If only HP had outsourced just a few more jobs...

[Poohbah]

I'm still trying to figure out how in the heck Lucent was supposed to make a profit.

[Doe Eyes]

- rather she was defending sending jobs out to foreigners. It's not quite the best face to put on it, especially when you are trying to sell your product to Americans.

If American's gave a hoot, outsourcing would be nonexistent.

[Bloody Sam Roberts]

It (was) something to the effect of "Americans don't have the right to a job".

This statement, though correct at its core...should have garnered her a bullet between the eyes. It reveals her to be something less than human....at the core.

[scrubby01]

I work for HP in the laser printer division. I, along with most of my coworkers, are hoping that stock price gets bashed enough that the board has to take notice or the shareholders pretty much force her out.

People are correct when they say Carly destroyed an American icon.

[Age of Reason]

Generally, I think she's an idiot. But she's dead right on this one

Well, if Americans don't have a right to a job, what's keeping her employed?

[Age of Reason]

Well, according to the constitution of the U.S.A., they don't.

Weell, excuse me.

I'll happily take that they pay those Indians.

I don't mind if all that will buy me in America is a cardboard box to live in.

[Age of Reason]

I believe she made some sneering comment a while back regarding outsourcing. It something to the effect of "Americans don't have the right to a job".

Next will be "Let them eat cake."

[mj1234]

My boss was at a computer conference last year-

They had Sun ,IBM,HP etc giving presentations and speeches..

Carly was on the HP stage and when some one gave a good answer

to a question she would toss that person an HP towel with a LOGO of

HP on it- the emcee for SUN said: "look over there

CARLY is throwing in the towel!!" -

fire and brimstone was in Carlys stare.

[lelio]

HP was THE best

That's what happens when you try to become the biggest player in a commodity market: the idea of driving costs down, instead of quality up, infects the rest of your company.

[smith288]

HP / Compaq makes a mean PocketPC.

[Nick Danger]

She immediately fired three top executives.

Oh, this will be fun to watch. The entire layer of management just under the three who were fired will now go into a 6-month period of backstabbing and political infighting as everybody tries to line up new alliances to replace the ones that just got shattered.

By the time somebody in a company that size gets within a layer or two of the top spot, they have a loyal army below them that expects to ride their coattails up the ladder. Shoot one of those guys, and you have a small army looking for a new general, and a bunch of generals hoping to add them to their army. Shoot three of 'em at once, and the place will be in turmoil for months, with palace intrigues of every sort going on as smart, ambitious people fight for position in the New Order. Meanwhile, they all take their eye off the ball.

Watch for "execution issues" to multiply over the next several months. Also watch for a decent-sized chunk of the now-headless army to rally behind someone whose plan is to stage a coup against Fiorina, grab the top spot himself, and put whoever jumps aboard now into some plum spots.

It sounds like the bad operating results came as a surprise. Fiorina probably figures she'll go before the board and tell them she found the culprits and shot them. Boards don't like surprises. Her trick may not work.

[TopQuark]

The sky is not falling.

Yes, but you are not allowed to say that: the self-described "conservatives" on this forum are not ashamed to be true socialists when it comes to corporations-bashing.

[kerosene]

Agilent.

[RadioAstronomer]

The only thing I can think of offhand that I have that is an HP product is my HP-48GX calculator. I used to use it all the time. It’s excellent but you don’t run around buying graphing calculators every year (or even every decade).

I have a considerable amount of Hp rack mounted equipment such as spectrum analyzers, frequency counters, signal and microwave generators, etc.. However, that type of equipment is now being built by Agilent which was spun off from Hp.

[KevinDavis]

I happen to agree with her on that...

[KC_Conspirator]

Got a story for you. A couple of months ago I had a question regarding printer drivers and called up the help desk for Hewlett-Patel. I was transferred to three different Indians and not a one helped me. They then transferred me back to guy in the states who helped me.