Posted on 09/19/2015 10:38:16 PM PDT by Perdogg
Thrust into the national spotlight thanks to Wednesday night’s GOP presidential debate, everything about Carly Fiorina is under the media’s microscope. Much has been said about Fiorina’s job record, particularly her tenure at Hewlett-Packard. Fiorina was fired from HP in 2005, a fact her opponents love to mention.
Certainly a possibility.
If she were doing well, she would not have been fired. One has to question this chart.
Are you being sarcastic? Because the chart shows the exact opposite of your thesis.
Around the time she was forced out, HP was doing worse than both IBM and Dell. Immediately after she left however, HP began rising, and wound up outperforming both IBM and Dell. In fact, after Carly left, HP was the most improved company on your chart... AFTER Fiorina.
Sun is not relevant because they weren't in retail PC hardware the way the others were.
BTW, I run two LLCs, so I'm not one of those you're tired of.
Actually Perdogg, it appears the stock cratered in 2002. Two to two and a half years later, and it hadn’t recovered very well. Two years after she left, things were turning around nicely.
That isn’t indicative of her looking real good there.
Do you disagree?
No one bats 1000.
It's way past stupid - it's wrong.
Those graphs actually are the best endorsement Carly Fiorina could get,
The poster of the graph is obviously not aware that IBM sold off it's PC business to Chinese Lenovo in 2005 IBMs stock went up because it got rid of it's PC business and concentrated on it's higher margin corporate and government support side of the business.
Scott McNealy and Sun tanked.
Dell, the other PC giant tanked.
The only computer PC maker that seems to do well is the Compac/HP merged entity.
So their you have it.
In the PC/Workstation Biz IBM folded and gave their PC business to the Chinese , Dell tanked, SUN crashed and burned and HP did great relative tot the rest of the business.
HP nailed the direction of the PC market and Fiorina’s changes for efficiency and cost reduction , bitterly fought by HP’s extravagant, self indulgent corporate culture, together the economies of scale generated by combining HP/Compac allowed HP to get ahead of the curve and be competitive as the PC industry transitioned from a smaller technology driven base to a much higher volume commoditized, consumer electronics business model
The chart Perdogg posted to exonerate Fiorina is a clear indictment. It speaks for itself:
Sun Microsystems shouldn't be included in the data. They were not in the same market (retail/business PC hardware) as the others.
Yeah it did.. AFTER Fiorina left. Just before she left, HP was sucking worse than Dell and IBM.
Sun is a non sequitur - they weren't in the same market.
And yet with this ‘great endorsement’ Fiorina still got her ass handed to her by a dumber than dumb Sen. Boxer in 2010. Carly herself must have had no clue to her HP ‘success’ as she had no answers to Boxer’s devastating ads.....in a race she was actually competitive in till those HP ads appeared.
No doubt about that.
Sun is a non sequitur - they weren't in the same market.
Even HP’s new CEO gave Fiorina the credit for making the hard changes that set the stage for the HP come back
SUN was trying to make the transition but they failed because they were blindsided by the rapid market shift to a commoditized, consumer electronics business.
Rapid advancements in CPU power, storage capacity , network speed and bandwidth enabled very fast user-friendly, self configuring systems that undercut SUNs market strengths in the high end desktop market and Sun's cost structure was way too high to make them competitive.
SUN got killed because nobody was willing to SUN prices when a PC could do the job at a fraction of the cost.
Ironically, low cost, very high powered PCs did to Sun what Sun did to Digital Equipment and IBM 20 years earlier
I would also add that some of her ‘success’ was due to ‘Right-Shoring’. As Fiorina said in 2004, “there is no job that is America’s God-given right anymore” calling what is generally referred to as ‘offshoring,’ as “right-shoring.” Not to mention possible HP ‘profits’ from proxy Iran sales.
You know? I don’t...
I don’t know how anyone can look at that chart and think it makes Fiorina look good.
HP merged with Compaq in September of 2001. A little over four years later, the stock not rebounding, she was jetisoned.
Once she was let go, the stock began to rebound.
What she couldn’t do in four years, the new team was able to do from the moment the barn door hit her on the back-side.
Look at that chart from the end of 2001 to the end of 2005. NOTHING!
Then look at the three or four years after she left.
Her backers will say she made the moves and HP grew even after she left.
The truth is, no growth occurred until a new team took over. And I’m thinking that new teem deserves the credit.
Fiorina did her best, and couldn’t turn things around in four years. The new team came in and turned things around from day one. That’s true too, because the stock went up the very day she was canned.
There’s no way to look at that chart and give her kudos.
She flopped!
You’re incorrect friend
Republican presidential candidate Carly Fiorina repeatedly has said “we doubled the size of the company” and “took the growth rate from 2 percent to 9 percent,” while she was CEO of Hewlett-Packard. Both statistics pertain to revenue, but Fiorina uses different time frames to boost her record. She also neglects to mention that the increase in revenue came after HP acquired Compaq and was accompanied by a decrease in net earnings.
Fiorina has given these statistics, and others, in response to questions about her firing from the technology company. She was CEO of HP from July 1999 through February 2005, when she was ousted from the company. She told NBC’s Chuck Todd on “Meet the Press” on May 10: “And what people fail to comment on is the fact that we doubled the size of the company, we took the growth rate from 2 percent to 9 percent, we tripled the rate of innovations to 11 patents a day.”
She rattled off similar points to Yahoo! News’ Katie Couric on May 4, saying: “We doubled the company to almost $90 billion. We took the growth rate from 2 percent to 9 percent. … We quadrupled the cash flow.” And those same claims are on Fiorina’s campaign website.
‘Doubled’ Revenue
Fiorina’s major move as head of HP was the acquisition of Compaq in May 2002. It was controversial — opposed by Walter Hewlett (the son of founder Bill Hewlett), who unsuccessfully contested the close shareholder vote for the merger in a lawsuit. But the merger certainly caused an increase in revenue, as the company known for printers moved into the personal computer market.
For the claim that revenue “doubled” to “almost $90 billion,” Fiorina compares the fiscal 1999 revenue of $42.4 billion with the fiscal 2005 revenue of $86.7 billion. HP’s fiscal year ends Oct. 31, so 1999 would include a little more than three months of Fiorina’s tenure, which began July 19 that year. She left the company on Feb. 9, 2005, so that fiscal year includes about three months with Fiorina at the helm. (The figures come from the company’s annual 10-K filings with the Securities and Exchange Commission.)
Fiscal 2004 may be a better point of comparison, since Fiorina was with HP for the full year. Revenue that year was $80 billion. That’s still close to a doubling since 1999.
The merger was a significant reason for the jump in revenue. In 2001, HP’s revenue was $45.2 billion and Compaq’s was $33.6 billion. In 2003, the first full fiscal year for the combined companies, HP’s revenue totaled $73 billion.
HP revenue growth chart, FactCheck.org
And revenue statistics alone don’t tell the whole story. Net earnings, or income, didn’t see the same kind of boost as revenue. In fact, if we look at the same fiscal years as the Fiorina campaign, net earnings dropped, from $3.1 billion in 1999 to $2.4 billion in 2005.
The company didn’t see a significant spike in earnings until 2006, when they hit $6.2 billion.
We asked Kartik Hosanagar, a professor at the Wharton School of the University of Pennsylvania, about using financial indicators to evaluate Fiorina’s performance. He said that normally the reduction in earnings (along with layoffs that occurred after the merger and a drop in stock valuation) “would by itself be enough to say that it was an unsuccessful stint. However, she was HP’s CEO during an overall tough period in the tech industry. Most companies laid off workers and lost stock market valuation.”
When we asked Fiorina’s campaign about the reduction in earnings that came with the growth in revenue during her tenure, we were referred to a spokeswoman for her super PAC, who noted that Fiorina led the company during an economic recession. “Carly Fiorina made the tough decisions that were necessary to reform the company, and HP and its shareholders reaped the rewards of those decisions after she left,” said Leslie Shedd, press secretary for Carly for America.
Conflicting Revenue Claims
Fiorina’s “doubled” the company claim is often followed by the claim that “we took the growth rate from 2 percent to 9 percent.” That, too, is a reference to revenue, but it isn’t calculated by comparing 1999 to 2005. Instead, her super PAC says the statistic compares the second quarter of 1999 to all of 2005.
If we use the same parameters as Fiorina’s “doubled” claim, revenue growth went from 7.5 percent in 1999 to 8.5 percent in 2005. But 2005’s revenue growth was only 6 percent on a constant currency basis, which is an adjustment due to foreign currency fluctuations. (In 1999, there wasn’t a significant currency impact.)
In a document that criticizes the Washington Post‘s FactChecker, Glenn Kessler, for taking issue with these same claims, the Carly for America super PAC says, “When dealing with complex information like SEC reports for $90 billion companies, you could cherry-pick different data sets to get the answers you want.” We couldn’t agree more. But it’s Fiorina, not Kessler, who’s doing the cherry-picking.
The PAC argues that the second quarter of 1999, the last full quarter before Fiorina joined the company, is the only fair starting point. But it uses an apples-to-oranges comparison by looking at the growth rate for six months ending April 30, 1999, (over that same period from 1998), and comparing that to the full year for 2005.
If Fiorina uses the full year for 1999, the increase in revenue growth doesn’t look as impressive, as we just showed. And actually, revenue growth decreased after HP adjusts the 2005 numbers for currency fluctuations.
Comparing the growth rate in one year to another, however, doesn’t reveal much about how the company performed over a six-year period. In fact, revenue growth figures fluctuated significantly during her time as CEO: In 2001, the growth was a negative 3 percent, while 2003, the first full fiscal year of the merged company, saw 23 percent growth, both currency-adjusted numbers. The 2003 10-K report filed with the SEC attributes the big jump that year to the Compaq acquisition, saying: “The net revenue increase in fiscal 2003 as compared to fiscal 2002 and in fiscal 2002 as compared to fiscal 2001 was attributable primarily to our acquisition of Compaq at the beginning of May 2002.”
HP revenue growth rate chart, FactCheck.org
Revenue growth didn’t follow a clear trajectory over Fiorina’s time; instead it dipped, increased and dipped again, as the chart shows.
Cash Flow and Patents
In saying she “quadrupled the cash flow,” Fiorina is comparing cash and short-term investments from Oct. 31, 1998 ($4 billion) to Oct. 31, 2005 ($13.9 billion). That’s an increase of 240 percent (or more than a tripling). Using Oct. 31, 1999 as the starting point — the same date used for her “doubled” revenue claim — drops the increase to 150 percent (cash and cash equivalents were $5.6 billion then).
Either way, it’s a sizable increase in cash flow, again primarily attributable to the 2002 merger. Cash flow remained around $4 billion through fiscal 2001, and then jumped to $11.4 billion in 2002 and $14.2 billion in 2003.
The number of patents also increased under Fiorina. She claims, “We tripled the rate of innovations to 11 patents a day.” Precise numbers are difficult to come by — and we disagree with the math provided by the PAC to back up Fiorina’s claim — but there is support for the claim that the rate of obtaining patents tripled.
Here’s how the PAC comes up with those numbers: It says, “When Carly started at the company in 1999, HP had 10,000 patents in force.” That figure also appears in a December 1999 news article. That year’s 10-K report doesn’t say anything about the number of patents. But the 2005 10-K report says the company had 30,000 patents. That’s an increase of 20,000 patents over six years, for an average of nine patents per day. Not 11, as the PAC says.
The sheer number of patents tripled, but — as the Post‘s Kessler also points out — Fiorina claims a tripling of “the rate,” not the number. The 1999 news article said that Fiorina had said patents were growing at a rate of five per working day. Since Fiorina is talking about a change in patent rates from the time she joined the company compared with the time she left, it’s best to look at the rate of patents in her final year with the company.
From fiscal 2003 to 2004, the final full year she was with HP, patents increased by 4,000, according to the company’s 10-K reports. That’s nearly 11 patents every day of the year, but if we discount weekends, we get 15 patents per working day. That would be a tripling of the rate compared with 1999.
The following year, HP saw an even greater increase in the number of patents, going from 25,000 at the end of fiscal 2004 to 30,000 at the end of fiscal 2005.
Now, the Compaq merger again had an impact on this facet of the company. Compaq’s 2001 10-K report (its last year before the merger) says the company had 3,900 patents at the end of that calendar year, with another 1,800 patent applications pending.
Btw
I do have extensive entrepreneurial and boss experience since aged 17 in 1974
I’m sure there are more successful here like stephenjohnbanker or southack or bnblflag(rip)
But I’m qualified to give reasonable appraisal of creating new businesses and IPOs and so forth
I’m involved in two new start ups as we speak on the Angel side which is why I post wee hours since I’m always busy 7 days a week
You don’t have to be a Fortune 500 CEO to comment of publicly traded company performance
So let's assume that she was hired to reduce costs and she did that well. I've heard she laid off 10,000 people at time when the "internet bubble" popped and she "saved" the company. When she then was asked to resign she was paid $21-$42 million bucks (if you include stock grants) to terminate her contract.
http://money.cnn.com/2005/02/12/news/newsmakers/fiorina_severance/index.htm
That will play really well to the voters and the media will make it the story in the general election. "Carly fires 10,000 and walks with $42 mil!"
That headline makes her unelectable.
This new team you speak of is a revolving door of 7 chairmen or CEOs in 10 years. The HP board is noted for being dysfunctional with several scandals before and after Carly held the CEO position.
I am not sure what HPs stock price has to do with running for president. She ran a fortune 100 company for 5 years, buying and merging a large competitor. She was fired because the merger took longer than some stock holders wished. They preferred more cost cutting (firings), so the stock would go up.
If you look at the current white house occupant. He never had a full time job. And the guy before was not a successful businessman apart from being a baseball team owner. While Carly is not the perfect candidate, she is at least as qualified as any US president in the past 14 years. And I’ll take her over Jeb Bush who probably has the best experience for the job.
I don’t much care for her, nor the claims of her doing in HP.
But in looking at the chart, if you look at when she started and when she was forced out, the data are not as high as in her tenure’s infancy. Only years after did it reach the same level as in 99-00. The eye is automatically drawn to the beginning and the conclusion of the data, her force out was in the middle near the low point.
Secondly, this is financial data only. If one were to do a total assessment he/she might also look at the number of jobs, overall revenues, production, etc. it would give a more complete picture.
Source please to this? Thank you.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.