HP (Palo Alto, Calif.) saw its GAAP net profit for the quarter ended July 31 fall 19 percent as a record $1.3 billion profit from services and double-digit sales growth in China were not enough to offset revenue declines in PC, software and servers, the company said Tuesday (Aug. 19).

"The PC supply chain has reached the leanest levels of inventory ever, in our opinion," wrote FBR Capital Markets analyst Craig Berger in a research noted circulated Wednesday. Any seasonal uptick in demand should lead to a healthy chip pull through in the third and fourth quarters of calendar 2009, Berger wrote.

Companies such as Marvell, International Rectifier, LSI Corp., Fairchild Semiconductor and ON Semiconductor "should benefit from improving PC demand in 3Q and grow that portion of business in the high-single-to-low double digits sequentially," Berger wrote.

PC hardware and storage days of inventory (excluding Dell) fell by one day in the calendar second quarter and are now slightly below all-time trough levels set in the third quarter of 2004 and the third quarter of 2007, according to Berger.

Berger also said that analog chip stocks should benefit from stronger-than-expected quarterly results reported by Analog Devices Inc. Tuesday.

HP said its quarterly net revenue fell to $27.5 billion, down 2 percent from the year-ago period. Revenue was up 4 percent when adjusted for the effects of currency fluctuations, according to the company.

HP posted net earnings of $1.6 billion, or 67 cents per share, in accordance with generally accepted accounting principles (GAAP), down from $2 billion, or 80 cents per share, in the year-ago quarter, the company said.

Non-GAAP operating profit was $3 billion, or 91 cents per share, up from 86 cents per share in the prior-year period, HP said.. Non-GAAP financial information excludes $568 million of adjustments on an after-tax basis, or $0.24 per diluted share, related primarily to amortization of purchased intangible assets, restructuring charges and acquisition-related charges, HP said.