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Hewlett Packard (NYSE:HPQ) reported its 1Q07 results after the close yesterday.

HP announced financial results for its first fiscal quarter ended Jan. 31, 2007, with net revenue of $25.1 billion, representing growth of 11% year-over-year, or 7% when adjusted for the effects of currency.

Those results were more or less in line with those posted by Ingram Micro (NYSE:IM). And like Ingram, Hewlett Packard expects the revenue growth rate to slow to a single-digit pace in the April quarter, despite the availability of Windows Vista for the entire quarter. So while the company’s new guidance is higher than consensus estimates, it still marks a slowdown. This, in turn, helps explain why the stock is trading down after hours.

Furthermore, Hewlett Packard showed a worrying negative cash flow from operations despite rising net income for the quarter. While one quarter’s numbers can be influenced by a variety of factors, the negative $1.9 billion swing from the same quarter last year at the very least bears monitoring. The main culprits were rising inventory and a change in “other assets and liabilities.” Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports, Second Edition warns that growth in such assets can be a sign that normal operating expenses are being capitalized, giving a temporary boost to earnings.

These concerns may prove temporary, but the market is in no mood for slowing growth and rising inventories - especially right after the launch of the product (Vista) that was supposed to launch a tech stock revival.

HPQ 1-yr chart:

HPQ 1-yr chart

Source: H-P's Earnings Beat Estimates But Concerns Remain