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Tuesday, October 21, 2008

Hewlett Packard (HPQ) NPD data disturbing

Frankly, all the NPD data was pretty disturbing with the market showing a dramatic slowdown as 401k's and house prices imploded and the headlines were full of significant financial institution failures.
PC growth was 1.2% y/y on unit growth of 6.7% y/y. HP revenue declined 3.9% y/y on a 3% y/y unit increase. This compares to a trailing 3 month historical average of 31.6% y/y. That is an extremely sharp deceleration. Printers, both hardware and cartridge, also declined. This was the slowest showing HP has had in the last 2 years. Understandable, but not pretty. About a month ago when HP reported I suggested shorting it when they reiterated guidance and said they saw no slowdown. Their guidance remains very vulnerable to a downward revision.



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