H-P hires Disney HR boss

Hewlett-Packard Co. said Friday it hired John Renfro, head of human resources at the Walt Disney Co., to run the HR department at its imaging and printing division.

Renfro will serve as vice president and report to Marcela Perez de Alonso, executive vice president of human resources for HP, and to Vyomesh Joshi, executive vice president of IPG.

Renfro will be responsible for improving organizational effectiveness, developing high-performance teams and delivering world-class HR programs for IPG, which reported revenue of $25 billion in FY2005.

Renfro, 46, joins HP after four years at Disney, where he served as senior vice president and chief human resources officer reporting to Robert Iger, president and chief executive officer. Previously, Renfro ran the human resources function at Gateway and Zenith and held senior HR positions at Ameritech and A.C. Nielsen, a division of Dun & Bradstreet.

Renfro will be based in San Diego and will join HP effective May 17.

HP plans more acquisitions

SAN JOSE, Calif. (MarketWatch)
HP will use six main strategies to grow, including pursuing organic opportunities and acquisitions, Hurd said in a speech delivered at the Bay Area Council's annual Outlook Conference in San Jose.

H-P has about $14 billion in cash and no debt, Hurd said, giving the computer and printing company the ability to leverage its finances to make acquisitions. "You won't see any transformational acquisitions," Hurd said. "But you will see us be more acquisitive."
H-P's $19 billion takeover of PC rival Compaq in 2002 helped contribute to the departure of Hurd's predecessor, Carly Fiorina.

Hurd said H-P isn't looking to sell its PC business, which generates roughly $30 billion a year in revenue. The PC business helps H-P control costs when it buys products for other parts of the company, such as its industry-standard server division, according to Hurd.
"We're not working on getting rid of the PC business," he said. "We're working on making it better."

HP's Hurd: year 1, kick butt; year 2...

HP investors are happy about CEO Mark Hurd's first anniversary, but wondering if he can keep the gains coming.

CNNMoney.com : Shareholders of HP are celebrating a happy anniversary -- the company's stock has risen 50 percent since Mark Hurd stepped in as CEO on April 1, 2005. But his hardest job -- boosting revenue at the tech behemoth -- is still to come.
Since taking over from ousted CEO Carly Fiorina, Hurd has trimmed fat and boosted profitability at the No. 2 computer maker, which had fallen on hard times after the Internet bust and its disastrous Compaq merger. Hurd took over as CEO of HP one year ago this April.

Shareholders say that in sharp contrast to the flashy Fiorina, Hurd is a no-nonsense manager who has brought focus and discipline to HP. Investors say he's a talented cost-cutter who has excelled in accomplishing his first task of increasing profitability.

"Carly was trying to drive revenue growth, and she was bleeding the printer business by using the higher profits in that business to fund unprofitable growth everywhere else," said Tony Ursillo, stock analyst for the Loomis Sayles Research Fund. "(Hurd) has dialed back the sales growth objectives and focused those units on operating more efficiently." But whether he can drive revenue growth -- next on his to-do list -- remains to be seen.

"Is he a visionary? I think the jury's still out on that," said Ursillo, whose firm bought shares of HP when Hurd's appointment was announced and increased its position substantially not long after that. But he added that Hurd has done a good job of recruiting and surrounding himself with talented executives, including those from Dell, Palm and a veteran of Siebel and IBM.

After the "rock star" CEO Fiorina was ousted by the board, Hurd, former CEO of NCR, which makes bank cash machines and check out terminals, wasted no time in slashing costs. He cut the company's work force by some 15,000, discontinued its pension plan in favor of a 401(k) and boosted profitability in flagging businesses like servers and software. The company beat earnings and revenue estimates for three straight quarters and also shifted its profit mix. It had been that 75 percent of the company's profits came from the printing business -- mostly "consumables," such as laser and toner cartridges for printers. Now printing is about half of profits, said Ursillo, not because that business is declining, but because the servers and software businesses are on the rise.

Mike Demos, equity analyst at Fifth Third Asset Management, said those areas had nowhere to go but up, and he thinks investors should be concerned about profit margins in the imaging and printing group. Demos works in the firm's core holdings group, which does not own shares of HP, but he said the firm owns shares elsewhere. "The printing business is still by far the most important franchise there," said Demos, noting that while it had a good quarter last quarter, margins have been falling, an area of concern mentioned by other analysts who follow the company. He adds that the business faces competitive pressure from retailers who offer in-store refills of toner cartridges.

Investors may wonder if the party's over, now that the obvious cost-cutting steps have been taken and shares have already enjoyed a big run. Ursillo thinks the restructuring will continue to reap benefits, though sales growth is unlikely to ignite anytime soon. Analysts on average expect 5 percent revenue growth in fiscal 2007, beginning in October of this year. Ursillo, more optimistic, thinks as much as 8 percent is possible. But that won't be easy. The company's biggest business is under pressure not only from domestic competitors like Dell and Lexmark but also foreign competitors and third-party ink suppliers.

"That's a huge challenge," said Kim Caughey, vice president and senior analyst at Fort Pitt Capital Group. Caughey's portfolios do not hold shares of HP, though she monitors the stock closely. "The margins are falling in printer and printing supply business." Ursillo said he finds HP's forays into consumer products, such as installing photo printing kiosks in drugstores and selling TVs at Best Buy, as the Wall Street Journal reported Friday, to be encouraging. "That is the perfect example of how HP can take advantage of both its market position and brand to address some large markets it doesn't play in too well," he said. But Caughey pointed out that making money in consumer products is tough, given how fickle consumers can be about products and brands.

Demos said growing revenues will be a much more difficult challenge for Hurd than what he faced his first year on the job, adding that the same "law of large numbers" that IBM faces is a problem for HP as well -- that is, when you already have upwards of $90 billion in annual revenue, growth in the double-digits is tough to come by. But Ursillo thinks the stock can cruise up to $40 -- from a recent $33 -- on restructuring alone. He points out that the stock is trading at about 17 times expected fiscal 2006 earnings.

"The stock's ability to keep outperforming hinges on continuing to gain market share where it's already present and on bringing to market some new and innovative products, particularly on the consumer side," he said. "If we see evidence of that growing, I think the stock continues to outperform through next year."

New Managing Director in France

Patrick Starck, Managing Director of HP France and Vice President and General Manager Technology Solutions Group, has made the decision to leave HP and pursue another career opportunity.

Johan Deschuyffeleer will serve as the Managing Director of HP France and Vice President and General Manager of the Technology Solutions Group, on an interim basis, effective immediately. Since 2004, Johan has been Vice President of Go-To-Market Strategy and Sales Productivity, leading the company-wide effort to improve value sales effectiveness and enable value and volume sales success in every market, region and country where HP does business. Prior to that, Johan served as Vice President and Country General Manager for HP Belgium, where he played a leading role in building and maintaining customer loyalty and trust throughout the HP/Compaq merger. While serving earlier as Managing Director for the Belgium-Luxembourg region, Johan succeeded in transforming the company into one of the main suppliers of IT infrastructure solutions in these two countries.

Johan holds a degree in Industrial Engineering from IHRB University in Brussels. He also earned a Master's Degree in Management from IMD International in Lausanne followed by further qualification from the Vlerick School.

What about Carly ?

One year after HP ouster, Carly Fiorina has a new life CIRCLING THE GLOBE FOR $50,000-PLUS SPEECHES

San Jose Mercury News / Feb. 9, 2006
By Nicole C. Wong

Toppled from her perch as one of Silicon Valley's most powerful women one year ago, Carly Fiorina has put together a new life that retains some of the trappings, if not the influence, of an elite corporate insider. Since Hewlett-Packard's board showed her the door, the ousted chief executive has been crisscrossing the globe -- and commanding big bucks -- speaking about how to be a good leader. In lots of little ways, Fiorina's past year has been about trading places. Her glory may be fading on the West Coast, but rising on the East Coast. HP removed her portrait from the lobby of its Palo Alto headquarters. But the University of Maryland -- where Fiorina earned her MBA -- hung one up in its Alumni Hall of Fame.While she and her husband still own a Tudor-style mansion on a 2.63-acre lot in Los Altos Hills, they bought a Georgetown condo in Washington, DC, for $3.6 million in May. And instead of leading Silicon Valley's legendary hardware company from the chief executive's seat, Fiorina is serving on the board of directors of two Washington-area companies: Cybertrust, a privately held information security firm, and Steve Case's Revolution Health, a venture that funds companies offering more choice in customer health care services.Slowly, she's been admitting some mistakes she made while at the helm of HP. But not many. And she remains resolute in her public speeches that the biggest and most bitterly fought decision of her HP tenure -- to merge the company with Compaq Computer -- has proved a success.

``I would do the merger all over again,'' Fiorina told more than 600 people who packed a Los Angeles ballroom to hear her October keynote address at the Internet Telephony Conference and Expo. ``I think the merger has been a resounding success.''As Fiorina, 51, has traveled the international corporate speaker circuit since she left HP, she's kept a low profile and shunned media attention. Her spokeswoman kept a reporter away this week, saying Fiorina is busy writing a candid book about her career, due out in September, and is about to travel abroad for two weeks.Speculation was once rife that she would take a high-profile government or public-service post. For a while she was rumored to be a candidate to head the World Bank, but that job went to someone else. Since then she's settled into the life of a former corporate executive in demand for convention keynotes.Her comments surface sporadically from reports around the world of her occasionally frank speeches.After giving an October keynote in Singapore on the essentials of leadership, Fiorina told the audience at the Asia Business Leaders Forum that while at HP she underestimated some people and overestimated others, according to two newspapers in Singapore. She also said she had not prepared people for the magnitude of the problems associated with the Compaq merger, which was completed in 2002.One industry analyst, Rob Enderle, said Fiorina's key flaw was misjudging people. She erroneously believed in the abilities of some people she picked as lieutenants but blew off powerful people like William Hewlett, the son of an HP co-founder who waged a publicly messy proxy battle against the merger.She also failed to build a solid group of supporters at HP. ``She thought she could dictate loyalty,'' Enderle said. ``She didn't have to build it.''But Fiorina isn't staying home to pout in her gated Los Altos Hills home. She'll be jetting off -- as was her style while still CEO -- to Australia and New Zealand to speak, again, about leadership at the Global Business Forum conferences starting Feb. 22.She'll be hobnobbing with other wealthy and well-known -- albeit unemployed -- ex-chief executives speaking at the event: Disney's ex-CEO Michael Eisner, Asimco Technologies' ex-CEO Jack Perkowski, and former U.S. President Bill Clinton.

Conference organizers will pay more than $50,000 for her hour-long leadership talk and question-and-answer session. That puts her in roughly the same league as Donald Trump, NFL Hall of Fame Lineman Howie Long, and Duchess of York Sarah Ferguson -- who are among the two dozen speech-makers available through the Washington Speakers Bureau for at least $40,001 a pop.Enderle, the industry analyst, thinks Fiorina's new focus as corporate board member makes better use of her talents.``She has amazing vision,'' Enderle said. As HP's CEO, ``her problem was she was not operationally oriented.'' But he added, ``On a board, she could be a relatively good asset.''Fiorina is also an impressive speaker, one of the few who rivals Apple Computer's Steve Jobs, Enderle said. And people will come to see the first woman to run one of the largest 20 U.S. companies, even if she did disappear from Fortune's list of 50 most powerful women in 2005.

Rich Tehrani, who snagged Fiorina to speak at the Internet conference last fall, said she seemed unpretentious and approachable when he called to arrange the appearance.``She wanted to make sure we didn't call her the most powerful woman in the world,'' Tehrani said. ``She seemed beyond humble. She's put on this pedestal by so many people, and yet is more humble than the person sitting next to you.''``Maybe that has to do with not working,'' he mused. ``Retirement may relax you to such a degree that you're not stressed out anymore.''

HP reports first quarter 2006 results

"Growth was balanced across most of our businesses and geographies, cash flow was strong and we were disciplined in controlling costs. While hard work remains ahead of us, our efforts are starting to show results." (Mark Hurd)

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"HP Smells The Team Spirit ! " (Forbes)

Mark Hurd has made eight executive hires since last June, and so far, the new faces have done wonders for the company's spirit, according to Bear Stearns analyst Andrew Neff.

"It appears that CEO Hurd is assembling an impressive team of executives from the outside in key management roles," wrote the analyst in a recent report. Examples of recent hires include former CEOs of Palm and Vignette

This is in contrast to prior leadership at HP, which were mostly internally supplied. "It corroborates our view of a renewed sense of vigor and competitive spirit at HP," Neff said. The analyst believes HP represents a turnaround story, not a growth story.

"It will need to develop growth engines as the cost story matures," Neff said. "However, investors often miss viable turnarounds as they seem too expensive for value players."