HP picks new leader to follow Fiorina
Published: 30 Mar 2005 08:50 BST
Hurd, 48, initially joined NCR in 1980 and rose up the ranks. He has worked as a senior sales and marketing executive and later as the chief operating officer. In March 2003, Hurd was named CEO.
The company, which last year generated $5.98bn in revenue, provides software, hardware and services for automated teller machines, data warehousing and IT services.
In the fourth quarter, NCR posted revenue of $1.79bn, a 9 percent increase over the previous year. And the company "With NCR, you had a company that was run poorly for three or five years, but within nine months, you had a sense of what Mark could do," said Jeff Embersits, an analyst with Shareholder Value Management. "He has a broad skill set and he'll go into HP and correct the strategy, product, management and costs — and probably in that order."
Although Hurd may change the line up of HP's management and tinker with its strategy within the first nine months, the effects from these structural changes may not be felt until 12 to 18 months, Embersits estimated.
During his tenure as NCR chief executive, the company has pre-announced higher-than-expected earnings for eight consecutive quarters — prompting some analysts to joke he was "sandbagging" Wall Street, Embersits said. But once the bulk of the turn around was completed, Hurd's NCR financial projections were roughly 95 percent in line with Wall Street's estimates, he added.
That's in contrast to HP's track record under Fiorina, in which the company issued several sizable warnings that its earnings would fall short of analysts' expectations.
Although Hurd has a track record of quickly implementing change at NCR while sitting in the CEO chair, the speed at which he works at HP may be less dramatic. Hurd had the advantage of spending more than 20 years at NCR before assuming the CEO role, so he was intimately familiar with the company.
He will also face the challenge of running a company that has revenues 10 times larger than NCR, as well as encountering intense competition from Dell and IBM while instituting change.
"It's a strategic challenge," said Chris Foster, analyst at Technology Business Research. "It's transforming this company from its hardware roots, and the Compaq hardware roots as well, into a software-and-services company that can execute. The future of tech is not in the PC and it's not in servers. It's getting to the level where they're more like IBM, where software and services drive the company."
Still, investors reacted swiftly to the news of Hurd's departure: NCR stock fell more than 10 percent in morning trading Tuesday, to $33.81 a share.
Shares of HP rose $1.99, or roughly 10 percent, to end the regular trading session at $21.78 a share.
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