Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Businessweek Archives

HP-Compaq Deal Hits Key Targets...Two Years Late


? Linux marches on |

Main

| Ganging Up on Google ?

November 17, 2005

HP-Compaq Deal Hits Key Targets...Two Years Late

Peter Burrows

When I saw HP's impressive earnings numbers today, they sounded vaguely familiar to those that HP management promised during the proxy fight over that controversial merger back in 2001. And it's true, at least for the two key businesses that the merger was supposed to help most: PCs, and enterprise gear such as servers and storage. Indeed, HP's PC unit more than doubled its profits, posting an operating margin of 2.8%. That compared to management's projection back then of 3.0%. The enterprise unit made even more progress, quadrupling profits to hit an operating margin of 9.1%, within a hair of the projection of 9.2%.

There's just one problem. HP had promised to hit these marks two years ago, in its fiscal 2003. Still, better late than never, I suppose.

Clearly, HP CEO Mark Hurd's efforts to tighten up HP's operational execution are working (Indeed, HP employees were giddy today, having earned a 7% bonus--the first such payout in years). But it raises an interesting question: Was Carly Fiorina, who was ousted amid much investor displeasure about the results of the Compaq deal, right for doing this deal? Would HP be better off today if it hadn't purchased Compaq, or as it is? Or put another way, should today's earnings news be thought of as "Carly's Last Laugh?" Or is Hurd the hero of the day, for having cleaned up a merger that many (including yours truly) felt was "Fiorina's Fiasco"?

06:50 PM

Hewlett-Packard

TrackBack URL for this entry:

http://blogs.businessweek.com/mt/mt-tb.cgi/


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus