No, Hewlett-Packard (NYSE: HPQ) is not getting into the old and rotten food market, but it is playing with new microchip molds for new products. The silicon valley tech giant (now the largest tech company in the world) said this week that it has invented a microchip manufacturing machine that will allow microchip manufacturers to produce chips that have connecting wires measuring just a few atoms wide. For the chip industry, this may indeed be an important breakthrough. But an important part of the breakthrough is that the machine takes a few minutes to install and start working, according to HP.

The machine is of the "imprint lithography" design where a chip design is imprinted into a substrate (backer) material which can accept metal poured in to make ultra-thin wires. The closer those wires are, the more processing power can be added and the less heat that is produced by the chip itself (along with less power consumption). Current technology from Intel makes wire "grooves and channels" in chips at about 45 nanometers (very, very small) -- and that's the state of the art tech right now in chips.

HP's new lithography process promises chips with channels that are only 15 nanometers, which is just a few atoms thick. A boon to HP's new process is that it can be incorporated easily into conventional chip-making processes. The more processing power that is needed requires chips with this power and with less power consumption than in previous designs. HP may have just hit the mother load here of the next generation of chips, and it may be able to sell quite a few of the systems for making these newer 15-nanometer products.

It's always been a tenet of mine that executive compensation should be tied to company performance. In many ways and in many companies it is. Stock bonuses and related options are generally the favored mechanism to retain good-performing executive talent and it works. At a recent Hewlett-Packard Company (NYSE:HPQ) shareholder meeting, one of the shareholder proposals was one tied to executive compensation. Naturally, I was intrigued.

It's a shame individual and institutional shareholders don't have more of a direct voice into how the company that they partially own is run. Yes, it's true that one can't really "know" the company and its situation without being involved day to day -- or is it? So much public information is available on every public company that an informed shareholder is not a hard status to ascend to, right?

One of the recent shareholder proposals -- which was passed even with HP management voting against it -- would measure executive pay in a way that long-term compensation packages involving stock options and hefty bonuses be tied directly to company performance. This was probably seen by many, as the outlandish pay package bestowed on former HP CEO Carly Fiorina after she was booted from the CEO spot caused quite a furor over those who don't agree with the insane golden parachuted given to non-performing executives.

Make no mistake -- like most of the working class and rank-and-file worker, pay should be based on performance as the overriding factor. This is not a government job, you know. This is the private sector, and performance talks (non-performance walks).

As Hewlett-Packard(NYSE:HPG) released solid numbers the other day, its shares sank a little after consistently skittish investors took some of the words from CEO Mark Hurd's mouth during the conference call and parlayed them into possible shakiness this next fiscal quarter. Well, that may be so -- and HP lost quite a few profit basis points while taking marketshare in its last quarter. But that is not the whole story on why HP has stormed back like a thunderbolt to squelch Dell's thirst for growth while becoming the largest tech company in the world --- surpassing even IBM.

Many can say that certain structures set up for former CEO Carly Fiorina have been exploited and improved upon by current CEO Mark Hurd, but I do not see it that way. Hurd's unique team mentality combined with a never-ending quest for the best growth and the absolute lowest costs within reason are the basis for HP's comeback recently. Hurd's dug in and has learned the business from the inside out, and being extremely informed and detail-oriented doesn't hurt either.

HP's consumer designs for notebook PCs --- which are in its largest-selling business segment of personal systems --- toast those by rivals like Dell and Acer in many respects. Hurd even spent a day on the floor of a Best Buy store to hear what consumers had to say about its products. That's dedication and probably gave him insight into the minds of actual customers -- something that most CEOs have no clue about beyond what studies and marketing departments state.

Will Hurd continue to make HP the premier tech player not only in PC and technology, but in services as well? IBM says that HP's commodity products are not that large of a threat. But if the products get the job done for consumers with considerable cost savings, then what is the difference between a costly and proprietary IBM system and an open-source HP system that performs the same tasks at a much lower price -- with services contracts being equal between the two? IBM and Dell best be on the lookout for where HP is going.

Cost discipline and revenue growth go hand in hand, said CEO Mark Hurd during Hewlett-Packard's (NYSE: HPQ) conference call last night. HP emphasized its unit volume growth for the quarter.

• Notebook units up 57%; 40% revenue growth
• Printer hardware units up 18%; revenue up 7%
• Personal system group, in total, was up 19% in units, with revenue up 17%

HP was able to gain market share gains while improving margins. The margin improvement in such a competitive market was impressive, as GAAP operating margin increased to 7.3% up from 6.6%.

However, the balance sheet and cash flow statement metrics showed signs which historically preceded difficult times for the PC business. Guidance was a bit weak and inventory has jumped up. In addition, there was concern about the apples to apples comparisons of gross margin due to the Mercury acquisition. In addition, there was some concern about sources and uses of cash. Particularly about $1.48 billion cash outflow for rebates and other uses--also a signal of a weakening PC business.

HP is a stock you do not have to rush into. There are warning signs that this stock might run into a couple of quarters of weak results. Stay on the sidelines for now.

Here we go -- HP is about to have its webcast on Q1 financials, with Chairman and CEO Mark Hurd leading the way. With competitor Dell releasing quarterly results next week, will HP meet, beat or dip below analyst projections for the quarter completed as of 1-31-07? We are sure to find out.

Please note: all times below are in PDT, and you will need to "refresh" your web browser often as this liveblog will be updated every few minutes as HP releases all relevant quarterly data and updates guidance and projections for Q2.

With that, here we go!

4:01pm -- on hold music is playing. What a soft and pleasant tone is being set for the webcast. Ahh -- how nice.

4:02pm -- HP is about on time (unlike most companies it seems). Here we go...

4:06pm -- CEO Mark Hurd starts the call by stating that he'll miss the outgoing Investor Relations executive. Mark also overviews the quarter in very general terms. We'll be at specifics soon.

Mark Hurd, the CEO of Hewlett-Packard Co. (NYSE:HPQ), was asked by the House Energy and Commerce Committee why he had exercised options and sold stock on the same day he was questioned by attorneys about the HP board spying scandal. Hurd must have known that the company would have to make public disclosures about the incident. He is also clearly bright enough to know that those revelations could move the stock price.

Mr. Hurd's response to the committee was that HP's lawyers told him that the sales were Okay. He said little, if anything, about the extent to which he applied his own reasoning abilities to the situation. Instead of saying that he was just following orders, he declared that he was just following advice.

It is an odd and hollow excuse that may well not satisfy the members of the House committee looking into the matter. It is not likely to close the matter for Mr. Hurd, either.

Douglas A. McIntyre is a partner at 24/7 Wall St.

This post is written as part of AOL Money & Finance's Best & Worst 2006. If you think this was the dumbest moment in business, cast your vote here.

What were Hewlett-Packard Company (NYSE:HPQ) executives thinking when they allegedly authorized the unlawful accessing of records and conversations to get to the bottom of leaks that appeared as if they were coming from inside HP's board of directors?

The executives -- and HP chair Patty Dunn among them -- probably thought they were acting in the best interests of the company and HP shareholders in trying to find out who continued to leak stories and confidential information to the outside world. A few small snags arose, though -- the means by which all this spying took place contained loads of illegal activity, although as an executive officer I would have wanted to track down leak sources as well -- even inside my own board.

Regardless of the nepotism on the board and who-knows-what-else political bickering, the first duty is always to the shareholders. Protecting confidential information from outside sources that could impact market price and other factors is right up there. Does the HP spying scandal count as one of the dumbest moments in business of the year? Well, it gets my vote for #1 -- how about you?

Just watching CNBC and saw that Hewlett-Packard Co. (NYSE:HPQ) had just reported fourth-quarter financial results:

• $0.68 earnings per share, analysts were expecting $0.64.
• Revenue was up 6% to $24.6 billion, the Street forecast $24.1 billion
• Operating income $1.9 billion
• Inventories climbed from $7.4 billion last quarter to $7.75 billion this quarter
• Guidance: 60-62 cents non-GAAP EPS, somewhat lower from Street's expectations

Revenue beat estimates by $500 million. Mark Hurd's cost cutting measures seem to have worked. Good profitability with expanding operating margins. Guidance is a concern.

Key drivers: Profitability and year-to-year growth in the computers, printers and services.

Shares are up a little in after-hours.

Hewlett-Packard Company (NYSE:HPQ) CEO Mark Hurd cannot seem to remember anything about the board leak probe that got the company's previous chairman, Patricia Dunn, in hot water. It's not enough that the poor woman has cancer, Hurd also decided to move out of the way while the bullet hit her.

Perhaps it is time to send Hurd to the dog track with a note pinned on him with his name and address. When he is done watching the hounds chase the mechanical rabbit, they can send him home on the bus.

It appears that almost everyone else at the infamous July 22, 2005 meeting remembers what happened. Hurd was napping.

Apparently, Hurd lectured employees about leaking corporate information to the media. But that must have been a coincidence.

Hurd has more to answer for and there is no guarantee that his job is safe if it is clear that his memory loss was just a convenience.

Douglas McIntyre is a partner at 24/7 Wall St.

Does it really mean a lot in the grand scheme of PC sales who is number one in sales from quarter to quarter? If it doesn't don't tell either Dell or Hewlett-Packard, which have been fighting an intense tug-of-war for almost a decade when it comes to trying to out-muscle each other in terms of being able to claim that one of the companies is the "world's largest computer manufacturer."

That title is vague when it comes to examining financials. I'd rather be the leader in several highly-profitable segments of the computer industry than be the overall world leader in sales with slim to zero margins. Who cares if you are the leader if you're unprofitable? I don't care, and if you're a savvy investor, you shouldn't care either.

But, as luck would have it, HP recently stole back the crown from Dell after three years to claim the "world's largest" again. Whether it lasts is another matter, but it does make for good (but useless) headlines. It's true that market leadership does mean a lot when profitability enters the picture. And it is in this case. HP's resurgence under CEO Mark Hurd has shown great gains in profitability recently, as well as growth in marketshare, like this latest crown change shows. This is the meat of which investors should take note.

At the same time, Dell has been experiencing one snafu after another, from public relations messes to product recalls to profits that aren't matching analyst expectations. It's pretty obvious that Dell is not sitting idly by waiting for things to change, but is being proactive in making the changes happen so that investor confidence returns as largely as possible while it continues to fend off the HP threat that is growing by leaps and bounds.

Hewlett-Packard Company (NYSE:HPQ) grabbed the global PC crown from Dell Inc. (NASDAQ:DELL) in the third quarter. HP shipped 100,000 more PCs that Dell, moving into first place for the first time in three years, according to research firm Gartner.

HP's global share is now 16.3% compared to 16.1% for Dell. Dell still leads in the US with a share of around 31% to HP's 23%.

Dell has been plagued by customer service problems and its image as one of the great growth companies among American firms has faded. Despite the board spying scandal at HP and the indictment of its former chairman, the company's CEO, Mark Hurd, is viewed as something of a turnaround artist on Wall Street.

The market has known that HP was moving aggressively and successfully on Dell for some time. HP shares trade near their 52-week high at $39, up from the low of $25.53. Dell shares change hands at $24.70, near the lower end of its 12-month range of $33.22/$18.95. While HP's stock is up 40% over the last year, Dell's is off almost 25%.

Dell has tried to fix its problems by moving some of its PC's to AMD chips, which are in high demand among some buyers. But there is no evidence that this has caused a surge of new sales.

With revenue and operating profit falling, Dell still has a long row to hoe.

Douglas McIntyre is a partner at 24/7 Wall St.

This really comes as no surprise -- former HP CEO Carly Fiorina, who was pushed out of the company's top job a little over a year ago by chairwoman Patty Dunn, was park of the pack who tried to investigate press leaks at Hewlett-Packard Company (NYSE:HPQ) as well. With former chairwoman Dunn (who is now indicted by the State of California for her part in HP's spying scandal) in the hot seat, one has to wonder if Carly is having her due. Well, not really -- her misplaced performance as a CEO was a mistake, although her finesse at sales and marketing (more emphasis on sales) shows a very strong track record in her career.

Carly's book, Tough Choices, is set to be released this coming Tuesday according to this Cnet article, although advance copies have been in the hands of scandal-happy reviewers already. One thing that seems interesting is the timing of the book. It coincides with the ongoing pretexting corporate spying scandal at HP right now, which resulted from leak investigations that initially started with Carly's authorization and under her watchful eye. Hmm.

This almost leaves current CEO Mark Hurd in the clear -- well, not quite. The current CEO has said that he was inattentive to some details about the ongoing corporate investigations, strange for such an operationally-minded CEO, and let some things get his approval without iron-clad due diligence on asking about the origins of the information. But, with the scandal now rocking the company having been started by a CEO predecessor -- insofar as just being approved, if anything -- Hurd will most likely stay perched atop the company where he has made significant changes and changed the once-declining fortunes of HP.

Hewlett-Packard's ongoing corporate spying scandal continues to reach new highs (and lows). Last week brought many former execs "taking the fifth" and former Hewlett-Packard Company (NYSE:HPQ) Chairwoman Patty Dunn and current HP CEO Mark Hurd taking the stand on Capitol Hill in some down-to-earth but brazen performances.

Hurd's approach reflected his personality -- a no-nonsense businessman who is an operational geek to the hilt and who takes full responsibility for HP and all incoming data traffic that lands on his virtual desk. What about Patty Dunn, though -- she's already resigned from HP's board. Not so fast.

Dunn and others are set to be indicted on unknown charges by California Attorney General Bill Lockyer. In information learned by the folks over at BusinessWeek, Lockyer is sending out neat little indictment packages to Dunn, former HP business conduct head Kevin Hunsacker and possibly others as well. Update: Dunn chose to surrender at a Silicon Valley courthouse on October 5, and will be arraigned November 17.

These new charges filed by Lockyer are being filed in obvious connection to the ongoing scandal at HP (been in a remote cabin in Montana for the past month?). HP hired investigators, who ended up lying to several parties in order to obtain the personal phone records of HP directors and staff -- including external journalists -- to assist in the tracking of leak sources to various pieces of the press, even plotting to plant spies at the WSJ.) Story at 11? Nope -- story all over the place.

Not too long after Dell Inc. (NASDAQ: DELL) had announced it would make Google the default search engine as well as bundle up Google Desktop software on its PCs, competitor Hewlett-Packard (NYSE: HPQ) announced that Yahoo! will be installed by default on its PCs. This has the signs of a classic "leader vs. follower" situation, as Dell and Google are first in their respective categories: Dell in PC shipments and Google in Internet search.

Despite HP's recent resurgence to catch Dell and regain the world's number-one computer manufacturer title, Dell still ships more product than HP right now. HP's CEO Mark Hurd, which has literally turned around the fortunes of a near-century-old company in a little over a year, has made HP "cool" again as well as boosted the fortunes of HPQ stock -- up almost 50% during his short tenure. Of course, Hurd and other HP execs and board members are now mired in a spying scandal that could cost him his job -- like it already has other HP execs this week.

But, scandals aside, Yahoo!'s addition to the HP lineup as an installed feature and search service will definitely allow the search-community-portal company to gain some ground as it tries to take share from leader Google -- and what lucrative share it is. Google attains almost all its revenue from Internet search. Yahoo! has been unable to gain that market share on its own, so taking some of it by partnering with HP could definitely help the fortunes of the Sunnyvale, California company. With Microsoft's Windows Vista on the eve of being released, both Google Inc. (NASDAQ: GOOG) and Yahoo! Inc. (NASDAQ: YHOO) seem to have found a way to possibly weather that particular storm -- and they both know not to count Microsoft Corp (NASDAQ: MSFT) out of the equation just yet.

One of the great mistakes made by Hewlett-Packard Company (NYSE: HPQ) in it board spying probe is that Mark Hurd, the CEO, was appointed chairman, effective in about three months. The announcement was made before it was reported that Hurd actually had a part in the investigation. Now, the company's chairman, Patricia Dunn, has resigned and Hurd has taken that job, in addition to being CEO.

Hurd has readily admitted that he had received a report about the investigation and some of the tactics used as early as March, according to The Financial Times. He indicates that he did not read it, but not everyone will believe that.

While it remains unclear exactly what Hurd did, he hardly has clean hands. Hurd may well have to leave Hewlett-Packard if the trail to him becomes more obvious. If he did know about the private detectives, phone records, and news reporter stings, the remaining members of the board may have to let him go. Hurd has clearly turned the company around, but that may not be enough if he had a role in or was aware of any illegal activity.

Who would be the candidates to replace Hurd? Going outside the company could be time-consuming and would mean bringing in another CEO who has to learn the company's businesses and culture. So, it would seem likely that a replacement for Hurd would be an insider -- an insider that the board is convinced had no role in the spying scandal.

The most likely new CEO of Hewlett-Packard would probably come from this list:

• Gilles Bouchard. He has been HP's CIO and runs global business operations. He has been with the company since 1989, so he knows that culture well.
• Vyomesh (VJ) Joshi. He runs the $26 billion printer and imaging group. He is an engineer, and several engineers have run HP. He has been with the company since 1980 and sits on Yahoo!'s board.
• Ann Livermore. She was considered a candidate for the CEO's job before it went to Hurd. She runs HP's $32 billion tech solutions group. She joined HP in 1982.
• Lawrence T. Babbio, Jr. A director of HP since 2002, he is the No.2 executive at Verizon.

If HP needs a new chairman and CEO, the job may be split between two people, as it was until recently. But the candidates would still be likely to come from this list.

Douglas McIntyre is a partner at 24/7 Wall St.