H-P Stays on Track

Updated from 4:42 p.m. EST

Hewlett-Packard(HPQ Quote) moved forward with its turnaround, reporting better-than-expected financial results and an optimistic earnings outlook for the year ahead.

Shares of H-P moved 6% higher to $30.74 on Instinet in after-hours trading.

The company said sales for the fourth quarter, which ended Oct. 31, were $22.9 billion, up 7% year over year and above analysts' expectations of $22.78 billion.

H-P's profit fell to $416 million, or 14 cents a share, from $1.09 billion, or 37 cents a share, in the year-ago period, due to a 37-cent-a-share charge related to workforce restructuring and amortization.

However, excluding the various items, H-P's earnings for the quarter were 51 cents, well above Wall Street's estimate of 46 cents a share.

H-P had guided revenue for its fourth quarter between $22.4 billion and $22.8 billion, and pegged earnings between 44 and 47 cents a share.

"H-P delivered another strong quarterly performance, with balanced revenue growth, good cost discipline, improved margins in key businesses and strong cash flow," Mark Hurd, CEO and president, said in a statement. "We are pleased with our progress to date, but there is more work ahead of us."

The company said revenue in its Personal Systems unit grew 9% to $7.1 billion, with unit shipments up 13%. On a year-over-year basis, desktop revenue increased 1% and notebook revenue grew 23%. Revenue for commercial clients, which includes workstations, grew 8% over the prior-year period, while revenue in consumer clients grew 14%.

The results compared favorably with last week's earnings report by Dell(DELL Quote), which posted a year-over-year 2% decline in desktop revenue and "mobility" (notebook) revenue growth of 14%.

After immediately slipping in after-hours trading following H-P's announcement, shares of Dell were recently flat at to $29.87.