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May 19 2011   5:36PM GMT

HP CEO forecast cuts kick up ruckus

badarrow Barbara Darrow Profile: badarrow

Many Hewlett-Packard VARs are not enamored of the company’s new CEO and have been vocal—if not attributable—in their view that he is not “the” guy to run HP. Most of those VARs were fans of the previous CEO, Mark Hurd.

Depending on your point of view, Hurd managed the company—or Wall Street’s perceptions of the company—magnificently. Those are two very different accomplishments.

Wall Street loved Hurd because he cut, cut, cut, cut costs. Also people. Also, some say, corners. At the same time, he spent big money on big acquisitions. if HP’s legendary “born in a garage”reputation for in-house innovation took a hit, who cared? The stock was flying high.

So, when the new guy, Leo Apotheker, warned of a tough upcoming quarter and cut his forecast, Wall Street freaked.

HP watcher Jeff Matthews, if no one else, doles out that credit .

Apotheker did the honorable thing by disclosing bad news, whereas Mark Hurd managed disclosures to exceed or at least meet Wall Street’s phoney baloney expectations.

But credit where due. Apotheker should at least get props for previewing bad news for HP shareholders instead of putting lipstick on that chicken once again.

The old Hurd HP, Matthews writes, was the master of using what should be unusable non-GAAP accounting measures to paint a Potemkin Village view of what was really happening at a company.

Money quote from Matthews:

Thus the fact that HP’s quarterly-earnings-obsessed past finally caught up with it is, as far as we’re concerned, notable only for the timing, coming as it does during a rip-roaring technology spending cycle. All bad things must, eventually, come to an end sometime.”

Let us know what you think about the story; email Barbara Darrow, Senior News Director at

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