Hewlett-Packard's

(HPQ) - Get Report

most recent quarter was a grind, with a slew of layoffs and the departure of a top executive -- so it's surprising that the company has drawn some grumbles of enthusiasm ahead of its financial report Wednesday.

A few analysts, including Merrill Lynch's Steve Milunovich, think H-P could slightly best expectations. He expects sales to total around $17.4 billion, slightly above the consensus estimate of $17.3 billion. Merrill Lynch hasn't done recent banking for H-P.

While his earnings forecast is in line with the Street's at 22 cents, Milunovich says there's potential for a small positive profit surprise in light of accelerated cost cuts. In September, the company said it will lay off 1,800 employees, on top of the 15,000 merger-related layoffs already announced, citing the weak market.

Likewise, Lehman's Dan Niles believes H-P's revenue is "in good shape," in part because of macroeconomic uptrends. In a recent note, he wrote, "Not only is the U.S. continuing to improve, but Europe also has started to turn around, and Japan had the best quarter-on-quarter growth of all regions, following a horrible July quarter, post-merger." Lehman hasn't done recent banking for H-P.

Within specific business lines, H-P looks strong on the printer side, helped along by new hardware introductions, said UBS Warburg analyst Don Young in a note Tuesday. The enterprise systems division is likely to prove a disappointment in terms of revenue growth, but he thinks cost reductions could boost the division's operating performance.

Still, even if H-P manages to wring upside out of the most recent quarter -- by no means a given -- nobody's expecting guidance to be a barnburner. "We expect conservative forward guidance for the January quarter, as there are few signs of a pickup in overall IT spending, and our CIO survey indicated a slow first half of 2003," wrote Young. UBS hasn't done banking for H-P.

Besides scoping out the earnings picture, investors on Wednesday will want a progress report on H-P's ongoing integration with Compaq, particularly now that former president Michael Capellas

is leaving H-P to take the lead role at

WorldCom

. That announcement ruffled feathers in the always voluble anti-Fiorina camp, particularly since H-P CEO Carly Fiorina has said she won't fill Capellas' old post.

Another source of interest will be H-P's pricing strategy. Last week

Dell

(DELL) - Get Report

confirmed speculation that it's been feeling some heat from H-P on pricing, especially on lower-end goods.

H-P's hard-nosed tactics may stem from panic over its continuing market-share losses to Dell, which recently knocked it off its perch to take the top spot in PC market share.