Hewlett Packard (HPQ)

By William Trent, CFA of Stock Market BeatHewlett Packard (HPQ) shares were off slightly after reporting that earnings beat consensus estimates – if you are willing to view their recurrent restructuring charges as non-recurring. While they have had their share of troubles this quarter, you have to hand it to them for reporting at all, the way things are going in tech-land (with everyone either delaying their report or giving partial data while being investigated by the SEC.)Revenues grew 7% year/year. That is not an exciting number, but at least it is better than some others we have seen.Inventories grew faster than sales, which management explained on the conference call thusly:Next, the balance sheet. HP’s inventory came in at $7.8 billion, up $873 million year over year and up $286 million sequentially. Inventory days of supply stands at 38 days, up from 35 days last year and down from 41 days sequentially. The year-over-year increase in inventory reflects volume growth, strategic buys and supply chain changes designed to optimize our cost structure. The sequential increase is in line with normal seasonality.We’re still a little skeptical, but the explanation is within the bounds of reason. Again, while not a major concern it was nothing to brag about.Overall, we agree with the after-market response to the report. This was a decent but unspectacular quarter for Hewlett Packard.The author may hold a position in the securities discussed.The author’s current holdings are as follows: Long: Intuit (INTU) put options; Nasdaq 100 (QQQQ) put options; Bookham (BKHM; Ballard Power (BLDP); Syntax Brillian (BRLC); CMGI (CMGI); Genentech (DNA); Ion Media Networks (ION); Lion’s Gate (LGF); Three Five Systems (TFS); Adobe Systems (ADBE) call options; Ceradyne (CRDN); IShares Japan (EWJ); StreetTracks Gold (GLD); Starbucks (SBUX); U.S. Oil Fund (USO); Plantronics (PLT) call options; Short: Lion’s Gate (LGF) call options; Dell (DELL) put options; Ceradyne (CRDN) call options; Plantronics (PLT) put options.http://stockmarketbeat.com/blog1/