Updated from 10:52 a.m. EST

Investors rewarded Hewlett-Packard ( HPQ) Wednesday for beating expectations in its latest earnings report, sending the stock 5% higher. The stock was recently up $1.02 to $20.70.

But a majority of analysts, who've recently stepped up their criticism of H-P, said they're not ready to start endorsing the shares yet.

"While the company regained profitability in its enterprise segment and grew profitability in its PC division, we question H-P's ability to deliver sustainable income in these segments," said Needham analyst Charlie Wolf in a morning note. He's keeping his hold rating; his firm hasn't done banking for H-P.

In fact, Wolf said he's reducing his 2005 earnings estimate slightly to $1.55 from $1.60, because he expects profits to be squeezed in H-P's printer division next year.

"Perhaps the most important comment on the call was that H-P will become more aggressive on printer hardware pricing in 2005," he said. In the latest quarter, printer operating margins of 16.6% were near a peak, but H-P is losing some share as Dell ( DELL) begins making inroads into the business. Since H-P will be forced to lower prices on its products, its profits will take a hit, Wolf believes.

At A.G. Edwards, analyst David Wong gave H-P credit for the strong rebound in its enterprise segment but added that the result "represents a recovery from a sudden and surprising disappointment last quarter rather than, we think, any fundamental strength." Of H-P's overall revenue growth of 8%, he pointed out, roughly half came from favorable currency trends.

Of H-P's consensus-beating earnings performance, Wong noted that 2 cents came from non-operating factors, with one penny of upside from a lower-than-expected tax rate and another penny from a lower share count due to H-P's share repurchases in the quarter. He's keeping his hold rating on the stock; A.G. Edwards hasn't done investment banking for H-P.

For the quarter ended in October, the Palo Alto, Calif.-based technology giant delivered net income of $1.1 billion, or 37 cents a share, for the quarter ended in October, up from $862 million, or 28 cents a share, a year ago.

Excluding special charges, per-share profit amounted to 41 cents, above analysts' expectations for 37 cents.

Revenue rose 8% to $21.4 billion, a quarterly record, ahead of the consensus estimate for $21.1 billion.

"After a challenging third quarter, I am pleased with the steady improvement in the fourth quarter," Chief Executive Officer Carly Fiorina said on a postclose conference call.

H-P didn't issue specific guidance for the quarter now under way, the first of fiscal 2005. However, it said revenue in the first half of the fiscal year will fall between $41.8 billion and $42.3 billion, with pro forma earnings per share of 72 cents to 74 cents.

The pro forma expectations assume charges of about 5 cents a share per quarter from amortization of purchased intangible assets and acquisition-related charges.

The outlook suggests possible upside to the current consensus estimate for the first two quarters of '05, which totals $41.8 billion in sales and 72 cents in earnings.

Chief Financial Officer Bob Wayman said that among the factors working in H-P's favor in the first half of the year are its improved performance in the fourth quarter, the favorable impact of a weaker dollar, and a reduced share count resulting from aggressive stock buybacks.