It wasn't too long ago that HP (NYSE: HWP) shares were tanking. The fact that the stock slide roughly coincided with Fiorina's appointment as CEO appears to be more coincidence than any evil chauvinistic conspiracy.
Let's take a look at what's happened to HP shares since she took the reins in late September:
HP shares were trading above $110 a share in early September, but the stock started to show weakness when analysts heard whispers that its fourth-quarter earnings and sales would fall short of estimates.
In early October Fiorina said HP had "a decent shot" at meeting the original First Call Corp. consensus estimate of 98 cents a share in the fourth quarter. She added, however, that it expected total sales growth to be at the low end of the 10 percent to 13 percent range projected by analysts.
Cost cutting and upsides no help
Unfortunately for Fiorina and HP shareholders, HP was unable to make up for the North American sales shortfall through cost cutting and upsides in other business areas. It was also tagged by an earthquake in Taiwan that disrupted PC production for several weeks.
Meanwhile, HP shares tumbled as several analysts cut the stock and lowered their earnings estimates.
Steadily, HP shares started their descent, falling to below $65 a share in late October even though it managed to beat lowered analysts' estimates. In the fourth quarter it earned $760 million, or 75 cents a share, on sales of $11.4 billion.
Analysts had lowered their estimate to 73 cents a share after the profit warning.
Fiorina must have felted jinxed. With apologies to Meg Whitman at eBay (Nasdaq: EBAY) and Carol Bartz at Autodesk Inc. (Nasdaq: ADSK), Fiorina is the top female executive in the technology industry, if not the world.
But after the dog days of October, a funny thing happened on the way into the new millennium.
HP shares started to pick up momentum on reports that sales of its low- and high-end servers were on the upswing. While the PC business was still struggling, early indicators pointed to a better-than-expected first-quarter profit.
From November to early February HP shares went on a remarkable run-up, surging 93 percent to a 52-week high of 132 ahead of its first-quarter earnings report.
HP delivered better-than-expected sales and earnings in its first quarter this week, raking in $794 million, or 80 cents a share, on sales of $11.67 billion.
First Call's consensus expected it to earn 77 cents a share in the quarter.
"We delivered excellent results overall, particularly in terms of revenue growth," Fiorina said in a statement. "This progress reaffirms the strategic choices we're making, and we're pleased with the market reaction to our accelerating pace"
Boost from earnings report
Predictably, analysts offered positive comments about the stock following the stellar earnings report.
CS First Boston analyst Michael Kwantinetz raised his 2000 estimate to $3.40 a share from $3.35 and reiterated his "buy" recommendation.
Lehman Brothers analyst George Elling raised his price target to $160 a share from $130 a share and Deutsche Banc Alex Brown analyst Phil Rueppel upgraded the stock to a "strong buy" and set a 12-month price target of $160 a share.
Rueppel said that while the competitive landscape continues to be challenging for HP, he sees a "definite turning point" in the company's attitude and execution level.
Fiorina and her management team deserve a lot of credit for that attitude change, as well as the sharp recovery in the stock price.
Now that we've seen how Fiorina dealt with perhaps the most inauspicious CEO debut in recent memory, it will be interesting to see how she handles a little bit of success.