H-P Busts Out a Sales and Profit Beat

Updates with new stock information and comments from Hewlett-Packard's post-earnings conference call

PALO ALTO, Calif. (TheStreet) -- Hewlett-Packard(HPQ) beat Wall Street's estimates in its third-quarter results, giving the tech sector a boost as it struggles to emerge from the recession.

H-P posted revenue of $27.5 billion, down 2% from the same period last year, but just above analysts' estimate of $27.25 billion.

The results, which were released after market close Tuesday, will be welcomed by investors desperate for good news after a turbulent spell marked by weak IT spending and job cuts.

Shares of H-P fell 2%, to $43.10, in extended trading.

The tech bellwether also beat Wall Street's profit estimate. Excluding items, H-P earned 91 cents a share on net income of $2.2 billion, compared to 86 cents a share and $2.2 billion in the prior year's quarter. Analysts surveyed by Thomson Financial had expected earnings of 90 cents a share.

"H-P's performance this quarter is a result of our strong business portfolio, efficient cost structure and scale," said Mark Hurd, H-P's CEO, in a statement. "Business is stabilizing, and we are confident that H-P will be an early beneficiary of an economic turnaround and will continue to outperform when conditions improve."

Including items, however, H-P earned 67 cents a share on net income of $1.6 billion, down from 80 cents a share and $2 billion in the prior year's quarter.

The third-quarter numbers nonetheless bode well for H-P, which competes with IBM(IBM) and Dell(DELL), according to Goldman Sachs analyst David Bailey.