H-P Ousts Fiorina

Updated from 3:50 p.m. EST

Carly Fiorina was ousted Wednesday as chairman and chief executive of Hewlett-Packard(HPQ Quote - Cramer on HPQ - Stock Picks), ending a stormy six-year tenure that was marred by the heretofore unsuccessful acquisition of Compaq Computer.

The shares rose $1.39, or 6.9%, to $21.53 Wednesday. They went as high as $22.26 earlier.

"While I regret the board and I have differences about how to execute H-P's strategy, I respect their decision," said Fiorina, one of the highest-profile female executives in the world.

Robert P. Wayman, the company's chief financial officer, was named chief executive on an interim basis. Patricia C. Dunn, a director, was named nonexecutive chairman.

"We thank Carly for her significant leadership over the past six years as we look forward to accelerating execution of the company's strategy," Dunn said. The company will begin looking for a permanent replacement immediately.

Fiorina's ouster comes about a month after the Hewlett-Packard board indicated it planned a modified role for the CEO in which some of her day-to-day duties would be transferred to other executives. Many believed the move would spare Fiorina the ax. H-P also recently announced it would combine its hugely profitable printer business with the less-successful personal computer division.

It was that division the former Lucent(LU Quote - Cramer on LU - Stock Picks) executive hoped to salvage with the May 2002 acquisition of Compaq, a $24 billion all-stock deal that doubled H-P's revenue and eventually lifted the company's profitability. H-P earned $3.5 billion on revenue of $80 billion in fiscal 2004 and said in its release Wednesday that it expects to match Wall Street estimates for the first quarter.

But while Fiorina's marketing savvy helped push the Compaq deal through with institutional shareholders, critics charged she lacked the operational talent needed to pull off the integration of the two computer pioneers. H-P's stock ended May 2002 at just over $18 and closed Tuesday at $20.14.