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The Many Bells and Whistles of Hewlett-Packard

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A fourth-quarter beat is only one reason to belly up.

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I have to thank the good man upstairs this morning -- I forgot to set my alarm last night, but my internal alarm clock worked like a charm: I only got up 10 minutes later than usual.

Asian stocks gave up some ground overnight. The Hang Seng and the Nikkei were off 1.53% and 1.01%, respectively. European stocks were lower this morning, too. And here in the US, we're currently trading lower.

Here's what I'm seeing this morning:

Hewlett-Packard (HPQ):
Mark Hurd & Co packed a fourth-quarter profit excluding items of $1.14. Not bad, as the Street was at $1.13. It exceed expectations on the top line, as well.

Some thoughts:

1.
Clearly the beat was cool, but there were two other tidbits that grabbed my attention even more. The first was this line in the release: "HP utilized $2.1 billion of cash during the fourth quarter to repurchase approximately 46 million shares of common stock in the open market. HP exited the quarter with $13.4 billion in gross cash." I get excited about stock buybacks for obvious reasons.

Second, that's a lot of flash still in its pocket, which gives this company options and flexibility that many others don't have these days.

2. The outlook got me, too. Per the release: "Full fiscal year 2010 GAAP diluted EPS is expected to be in the range of $3.65 to $3.75, up from its previous estimate of $3.60 to $3.70, and non-GAAP diluted EPS is expected to be in the range of $4.25 to $4.35, up from its previous estimate of $4.20 to $4.30."

The bump up is nice to see, and it's in line with expectations But I think management is playing it slightly conservative, and there could be some decent upside to that outlook. After all, this company has pretty consistently met or beat expectations.

3. The shares gave up some ground in after-hours action. If that continues in today's session, I'd see it as a sweet opportunity to belly up. With good management, arguably solid earnings expected, a great name, and momentum in its favor, I think this stock deserves to be making new highs.

For my last take on the company, see Does Hewlett-Packard Have Cisco Worried?

LDK Solar (LDK):
In the third quarter, the company put up $0.27 per ADS -- a pretty sunny result because the estimate I'm seeing is for a loss of $0.10 per ADS.

Some thoughts:

1. It put up a surprisingly good number, and also painted a decent outlook. The following line in the release stood out: "For the fourth quarter of fiscal 2009, LDK Solar estimates its revenue to be in the range of $280 million to $310 million with wafer shipments between 320 MW to 340 MW and module shipments between 20 MW to 30 MW." Analysts were looking for just under $259 million in revenues.

2. But the company doesn't really light up my life. Sure -- it was a great beat. But that $0.08 that's expected in 2010 isn't enough. And I remain skeptical of how intense the overall push for solar-related items will be in the near-term.

For my last take on the company, see Ticker Shock: Three Reasons LDK Solar's Future Looks Cloudy.
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No positions in stocks mentioned.

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