Sure, maybe tech spending will rocket back to its late-1990s form. But with each new signal to the contrary, Wall Street loses a little more patience with Hewlett-Packard ( HWP) CEO Carly Fiorina.

H-P warned Thursday that fiscal third-quarter sales would fall below well-lowered expectations, and set plans to fire 6,000 additional workers. It's the third time H-P has warned on its third quarter. It's the sixth time H-P has warned in 2001. And though there's little to be done about a global slowdown in demand for tech gear, it's raising the question of how short time is for the woman H-P chose to lead its recovery just two years ago last week.

"They wanted someone who would be just like IBM's Lou Gerstner," says Fred Hickey, editor of the High-Tech Strategist newsletter. "Someone who would buy back a lot of shares and financially engineer the company. H-P's shares weren't being rewarded and IBM's were. But she came in too late and ended up in a buzz saw. She's not long for the world." (Hickey has no position in H-P.)

Big Talk

There haven't been too many recent CEO appointments that met with greater fanfare than Fiorina's. Anointed by Fortune magazine in 1998 as the most powerful woman in American business, Fiorina came to H-P in July 1999 after spending more than 20 years at AT&T and then Lucent. Fiorina was credited with building Lucent's international business and directing its $3 billion initial public offering in April 1996 -- at the time, the largest IPO ever.

Weak
H-P since Fiorina's arrival

That pedigree looked a whole lot better in mid-1999, when Lucent's shares had risen more than 600% since their IPO, than it does now, as the company struggles through another restructuring. Lucent is now 90% off its highs, sitting about where it closed on its first day of trading five years ago. H-P itself has sunk 40% since Fiorina came.

Fiorina's tenure at H-P hasn't been without its gaffes. Last year, trying to manage the chaotic complexity of the $50 billion tech behemoth, Fiorina collapsed 83 separate units down to four. The move made sense, says A.G. Edwards analyst Shebly Seyrafi, but led to a good deal of confusion in the sales force -- confusion that H-P is paying for today, and still trying to fix. There was also the much-publicized snafu among the company's salespeople, who were found to be competing against H-P's own channel resellers. H-P is still dealing with that problem, too.

Hurry Up and Wait

"They tried to do too many things too quickly," Seyrafi says. "A lot of those organizational changes have long-term benefits, but in the short term, they've been very disruptive."

On the Outs?

Wall Street soon may grow weary enough of Fiorina to force a management change. But doing so would overstate her role in the current downturn -- just as early accounts of H-P's turnaround under Fiorina understated the role played by a global boom in IT spending from which nearly every other technology company was benefiting. Both Seyrafi and Hickey agree that Fiorina is playing out a tough hand: In PCs, storage, servers and services, H-P is fighting for the right to claim secondary or even tertiary positions. The only market H-P dominates is printing, and even that lucrative market is getting hit right now, thanks to poor demand and a low-end price war with Lexmark.

The real lesson of H-P's warning is more unsettling than some would like to think, for it suggests that tech investors should be much warier of the direction business is trending. Before Thursday, H-P had last lowered guidance for the third quarter at its semiannual analyst meeting in early June. Having been burned so many times before, the company has little interest now in setting expectations unrealistically high. Business must have deteriorated at an absolutely blistering pace since then.

In that light, the recent refusals of Nortel, EMC and Sun Microsystems to provide financial guidance look ominous indeed.

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