January-February 1992 7 Liftoff
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Taking stock in HP The stock market can have an the stability of a roller coaster, so how well you communicate with crystal-ball gazers is vital. We have liftoff HP test equipment plays a key role in testing the space shuttle and an innovative mechanical arm before blastoff. YourThrn 11 page 12 Measure readers share their views on matters of importance. That's "show" business 12 Telecom '91 may have been an eye-popping, glitzy show, but it also was an important showcase for HP's telecommunications business. A taste ofthe future 16 HP Vectra PCs help automate fast-food favorite Taco Bell. Thrning Up the heat in New Hampshire 20 People at the Exeter Computer Manufacturing Operation show their stuff in making tough production and quality goals. Culturally speaking 23 'fraveling for a multinational company like HP can be intimidating, but understanding the ways of the world is a cultural feast. page 20 Letter from John Young 27 ExtraMeasure 29 News from around the HP world. MEASURE Edrtor: Art Director: Associate editors: Graphicdesigner. JoyColeman' Annette yatovilz Cornelia Bayley Thomas J. Brown Betty Gerard' Measure is published six times a year tOf employees and associates of Hewlett·Packard Company. It is produced by COfparate Communications. Employee Communications Department. Mary Anne Easley. manager. Address COfrespondence to Measure. Hewlet1-Packard Company. 2OBR. P,O Box 10301. Palo Alto. California 94304·1181 USA, The telephone number is (415) 857-4144 Employees should report changes of address to their local personnel department, On the cover: HP's cultural ~ Copyright 1992 byHewlett-Pacl<ard Company. Material may be reprinted with permission makeup comes in many 'Member, International Association 01 Business Communicators (lASe), flavors. For a "taste" of how best to conduct business Hewlet1-Packard Company is an international manufacturer at measurement and computation products and around the world, see the systems recognized for excellence in Quality ond support. The company's products and services are used in story on page 23. Cover Industry: business, engineering. science, medicine and educahon in approximately 100 countries, HP employs photo by Douglas Peck 89.000 people worldwide and had revenue of $14,5 billion in its 1991 fiscal yem * Measure magaZIne is printed on recycled paper, 2 MEASURE USINESS On November 19, 1991, HP's ChiefFinancial Officer Bob Wayman, TI' asurer George Newman and1teasuryManager .J Zaelli t at Corporate offices with headphones donned. It was 8 a.m. in PaloAlto, California, and they were about to talk to 130 securities analysts from around the United States By Michael Scofield about the fourth-quarter financial results HP had publicly released two hours earlier. By the time they'd finished, the HP officials had spent 30 minutes on presentations and an intense Stock-market prices hour on questions and answers. can have all the stability The reason for the quarterly conference call with securities of a roller coaster. How analysts is simple-to help these highly influential people well you communicate Ullderstand HP's financial results. with Wall Street's crystal What are the sessions like? ball gazers can make "In a 60-minute question-and- answer pe110d any of 130 ana all the difference. lysts could ask questions about any ofHP's 12,000 products, or sensitive questions about HP's financial peliormance, and our job is to answer the questions as quickly and knowledgeably as possible," George explains. Adds Joe, "It can be an unnerving experience at times." George's earnings-day routine is the same: He always stops by HP's Corporate Communications department at 6 a.m. Pacific Coast time-30 minutes in advance ofthe 9:30 a.m. Eastern Standard Time opening of the New York Stock Exchange-to see that the quarterly earnings press release has been posted on ,January-Fehruary 1992 3 Stock HP's electronic bulletin board. President and G.M. Kenzo Sasaoka. At the same time, Investor CommWli The stock that "Having HP listed on the Tokyo cations Manager Steve Beitler ensures exchange helps our salespeople open that faxes with the same data have been (almost) never sleeps doors." sent to HP offices in Europe and Tokyo, Here are the exchanges on which HP \\'hile Hl88 saw HP's fin;t li.sting in and to Business Wire, which di<;tributes stock is listed. When the New York Tokyo: and iL<; first listing in Europe a financial information to United States Stock Exchange opens at 9:30 am., year later, the stock has traded on the and international wire services and it's 2:30 p.m. that afternoon in Lon New York Stock Exchange since 1961. publications. don, 3:30 p,m. in Pans, Frankfurt and It's New York t.hat sets the standard for That particular ~ ovember morning, Zurich, 6:30 a.m. in San Francisco and prices worldwide. Bob, George, Joe and Steve reported 11:30 p.m. in Tokyo. When New York OfHP stock outstanding, HP that, due to special charges for volun stops trading at 1p.m.,'Ibkyo won't employees own about Gpercent. tary-severance and related programs, openfor two hours-at 9 a.m. the Non-HP indi\iduals own about l~ per HP's net earnings for the fourth quarter next day. cent. Co-founders Dill Hewlett and were dOvvn 38 percentfrom the fourth Dave Packard and their foundations quarter offiscal '90. own approximately 26 percent. By the end of the day on the 19th, With 2!'i1 million shares ofstock out But firms that manage investment HP's stock price rose 12.5 ('('nl" on the standing in the Cnited Stat.es and over portfolios, such a<; stock mutual funds, New York Stock Exchange. seas-representing $12.5 billion at SSO penSlOn fun(b, hank trust departments Why hadn't it fallen instead? per share-HP IS a major stock-market and insurance companies, constitute "Because," says George, "disregarding presence. On a typical day, investors lIP's largest owners. They o,""n £SO per the special charges, our per-share earn will buy or sell about 700,000 of those cent of HP shan~s. ings for this quarter would have been an shares-5i)O,OOO through the New York Usually lumped under the term "insti increase over last year. 'h'hile analysts Stock Exchange, 50,OllO each through tu tions,~ firms that manage investment" expected slightly higher earnings in the the London, England, and Frankfurt.: fourth quarter, they recognized that our Germany, exchanges and about 10,000 operating results were pretty good com each through the Pacific Coast, Paris, pared to most high-tech companies. France, ZUliC'h, Switzerland, and Tokyo, ... senior officers should "When financial results are favorable, .Japan, exchanges. the stock price usually lises. \\-'hen the .-'\lthough the numher ofshares spend their time managing results aren't, the price usually drops. traded outside the United States is rela HP's business. "In the long run, stock value reflects tively small, being listed internationally a company's health and potential. :\lost is important for HP's business. analyst" feel that our lack of long-term Franco l\-1ariotti, senior vice president represent 8:") percent of the daily buying and director of HP's Europe/Midclle and selling ofall stocks listed on the EastAfri{'a Operations: says, "Listings in New York Stock Exchange. Europe give us stronger local presence, Although some company CEOs rou HHP is one ofthe healthiest, That means more i.nvestors, more press tinely communicate directly with secu big high-tech companies coverage, and greater attention and rities analysts, HP's philosophy is that commitment to the economies ofthese senior officers should spcnd their time around." key European cotmtries. managing HP's husiness. George and "There is no doubt that sinc(' our list Jo(' are the ones who deal ex1enslvely debt, product diversification and a"tute ings in 1989 we've developed our links with analysts. R&D makes HP one of the healthiest, with fmancialmstitutions, and shown Says George, "We can't avoid some big high-tech companies around. Short higher-than-average sales growth for p!ice ups and dO'-"l1S; ifyou've had a term, it's a different story. Market con computer systems in the financial and disappointing quart.er it 'will negatively ditions, emotions and a host of other banking markets " in1paet your stock price. Tbe company factors can influence the market." Adds Yokogawa-He\ovlett-Packard has always lwen conservative when 4 ME.AS(IRE - Investors buy 700.000 shores of HP stock each day on the London, Frankfurt, Paris, Tokyo and New York (above) exchanges. talking with the finandal community. More impOltantly, most of the 50 or • (Aggressive huy) "We hdiev(' HP is The strongest tooLe; .Joe and I have in so analysts who look at HP "under a the healthiest large cap stock under our building confidence among analysts microscope," a" George puts it, are posi coverage." - John.Jones, .\tlontgomery are to get the same information out tive about HP. For example, following Securities fast, treat everyone ofthem the same the Den'mber 1991 securities analysts \\-'hy-using the same financial and be responsive to their requests." meeting in Palo .l\.Ito, analysts issued data-did analyst.'; differ so ....,ridely The quarterly conference call" are these recommendations to their client.,: in their recommendations'? only one way HP communicates directly • (Buy) "HP's meeting further con "Like most of us, analyst5 see the with analysts. The company hosts more vinced us that the company is the class same facts in diJferent ways," George than 200 analyst.'; at a 21;~-hour breakfa"t of the computer industry and the stock explains.