Why dis Fiorina?

Two takeaways from Hewlett-Packard's most recent earnings report: Carly Fiorina still can't claim ultimate vindication, but neither can Walter Hewlett.

And that leaves me wondering why Fiorina keeps getting the big dis.

In the company's just completed fiscal second quarter, HP increased net income by 34 percent on a record $20.1 billion in revenue, thanks to across-the-board strength in servers, printers and services. That exceeded the year-ago numbers and was a moon shot higher than the consensus on Wall Street.

Rhetorical flourishes notwithstanding, HP still needs to translate those gains into fatter corporate operating margins.

So what does this say about Fiorina's stewardship as CEO? In person, she's corporately prim and proper, and never lowers her guard. But on a gut level, you have to believe that Fiorina relishes the moment.

She put her corporate neck on the line by pushing through a deal that faced almost uniform "opposition" in the investment community. The numbers have since quieted the critics who skewered her for hatching the Compaq acquisition.

Many ridiculed the idea; others ridiculed her personally. She was further put to the test when Walter Hewlett, a well-connected board member, used his ample means to finance a rear-guard insurgency. The son of one of the company's co-founders, Hewlett was undeservedly painted as a trust fund dilettante. In truth, he forced into the open the valid question of whether Compaq was an albatross.

Neither side took the high road in what was an exceptionally rough campaign. Yet the mudslinging paradoxically forced Fiorina to summon up her top performance as a corporate manager. The HP and Compaq executives worked through the premerger planning and buttoned up most of the unresolved questions prior to the vote. The payoff two years later is an HP in quite good condition.

After the most recent quarter, management upped its estimated revenue for the second half of its fiscal year to $40.7 billion from $39.7 billion. PC operating profits improved, and average selling prices actually increased for both laptops and desktops, something Dell cannot claim--a point Fiorina couldn't resist making during the conference call.

The coda won't be written for several years, but you have to wonder why Fiorina has failed to receive more credit.

"Our business continues to fire on all cylinders," she said. "We're gaining ground, despite competitive rhetoric."

Fiorina's annoying fondness for business rhetoric notwithstanding, HP still needs to translate those gains into fatter corporate operating margins before it wins more Wall Street hearts and minds. The company still depends too much on its PC business, and that means slugging it out with Dell. HP also remains miles behind IBM in the services business.

These are relative quibbles, when you consider the number of employees, customers, products and strategies involved in pulling off this megamerger. You want an analogy? Think about the logistics behind the 1944 Normandy Invasion.

Fiorina still catches an awful lot of flak--some of it deserved; much of it not--for her handling of the job. But I don't think that any of the talk has dented her sense of self-esteem. After all, this is someone with a pretty large ego--and much ambition. If the HP-Compaq combination proves itself, Fiorina will be written up in history books as the executive who rescued HP from a rendezvous with mediocrity.

The coda won't be written for several years, but you have to wonder why Fiorina has failed to receive more credit. Perhaps things would have turned out differently, if her name were Charlie.