Shares of technology company Hewlett-Packard (NYSE: HPQ) fell Wednesday, a day after the firm gave a mild forecast for its upcoming quarter.

After the closing bell on Tuesday, HP reported first quarter earnings growth of 26 percent, but also said that it expects a second-quarter profit between 63 and 64 cents per share, roughly in line with analysts estimates of 63 cents per share.

HP appears fairly valued at its current level, said Needham analyst Charlie Wolf to clients. Our free cash flow model, which assumes an 8% revenue growth rate and a 10% operating margin, translates into a fair price of $40, close to HP's current share price.

The market's reaction took some of the luster away from the company's strong first-quarter numbers. Shares of HP fell 4.13 percent, or $1.83, to $41.30 in mid-day trading.

Late Tuesday the firm said it earned $1.55 billion, or 55 cents a share, for the quarter ending Jan. 31. The first fiscal quarter of 2006 saw a net income of $1.23 billion, or 42 cents per share.

Excluding one-time charges, the company said it earned $1.8 billion, or 65 cents per share. A survey of analysts by f Thomson Financial projected 62 cents per share.

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