H-P Riding Hurd
Updated from 2:23 p.m.
Hewlett-Packard
(HPQ) - Get Report
surged Tuesday after tapping
NCR
(NCR) - Get Report
chief Mark Hurd to replace the ousted Carly Fiorina.
The selection, confirmed by H-P after Tuesday's market close following a series of midday news reports, marks a rapid end to H-P's high-profile executive search after less than two months. Word of the decision sent NCR shares plunging 17% and H-P up 9%.
"Mark came to our attention because of his strong execution skills, his proven ability to lead top performing teams and his track record in driving shareholder value," Chairman Patricia Dunn said. "He demonstrated these skills by turning around NCR, which, while smaller than HP, is a complex organization with multiple business segments."
Hurd was first cited as the prime candidate on Monday by
Business Week Online
.
The Wall Street Journal
followed on Tuesday by reporting that Hurd's selection was final and that a formal announcement would be made later. At midafternoon NCR joined the fray, saying Hurd "has resigned from NCR, effective immediately, to accept a position with a large global technology company."
At NCR, Hurd oversaw a diverse product line encompassing data warehousing, ATM machines and retail store automation. Although much larger than NCR, H-P will offer Hurd the chance to oversee a broad array of products ranging from servers and workstations to services and printers.
He will also be charged with making hard decisions about where to take H-P, which has found itself pinched on the low end of the information technology hardware business by
Dell
(DELL) - Get Report
and on the high end by
IBM
(IBM) - Get Report
. Fiorina found herself unemployed when it became clear the company had
failed to gain ground on either end.
Hurd worked at NCR for 25 years, taking the chief executive position two years ago March. Before that he served as president and chief operating officer. During his time as CEO, NCR's stock rose four-fold.
Hurd would be the second straight outsider to run H-P, a company that cultivates a strong internal culture that's legendary in Silicon Valley.
Fiorina, who joined H-P from
Lucent
(LU)
, was often criticized for not being able to work within that culture to move the company forward. She championed H-P's merger with
Compaq
even as some directors and major investors sharply criticized the plan.
Two other strong candidates for the job have or had ties to H-P. One was believed to be Vyomesh Joshi, executive vice president of H-P's imaging and personal systems group. Joshi's imaging and printing products accounted for 30% of H-P's sales in 2004, but 73% of its earnings. Rick Belluzzo, chief executive of
Quantum
(DSS) - Get Report
and a former No. 2 at H-P, was also thought to be another top candidate.
In the end, H-P appears to have gone with Hurd because of his recovery and execution abilities, according to the Wall Street Journal.
When Hurd took the top spot at NCR, the Dayton, Ohio-based company's stock was at its lowest point since being spun off from
AT&T
(T) - Get Report
and its sales had declined for three straight years. He implemented a two-year restructuring program to enable NCR to save $250 million annually.
In 2002, NCR lost $220 million on $5.6 billion in sales. Last year, the company earned $290 million on $5.9 billion in sales.
Hurd will again be challenged at H-P. The company's revenue was $79.9 billion last year and it earned $3.5 billion, with most of that coming from the printer and imaging unit. In 2003, H-P tallied sales of $73 billion and it earned $2.5 billion.
Earlier this year, H-P instituted
another restructuring, placing its personal computer systems group under the management and oversight of its dominant imaging and printing unit. The company is also facing contracting margins and
has vowed to cut costs and improve its supply chain.