HP shares soar after solid 4Q outlook

Hewlett-Packard Co. surprised Wall Street on Tuesday by saying its earnings will be slightly above analysts' expectations, going against the grain as other technology bellwethers have slashed forecasts and posted weak results in the sagging economy.

Its shares climbed more than 12 percent in morning trading.

The Palo Alto, Calif.-based computer and printer maker expects earnings of 84 cents per share and adjusted earnings of $1.03 per share for the three months ended in October. This is slightly better than the $1 per share, excluding items, that analysts polled by Thomson Reuters are expecting.

HP forecast revenue of $33.6 million, just ahead of analysts' expectations of $33.09 billion.

The company, which plans to release full quarterly results on Nov. 24, said in a statement that it was benefiting from "global reach, diverse customer base, broad portfolio and numerous cost initiatives."

HP's $13.9 billion acquisition of Electronic Data Systems Corp. (nyse: EDS - news - people ), completed in August, boosted the quarter's revenue, which grew 19 percent year-over-year - or 16 percent when adjusted for the effects of changing currency exchange rates. Without counting EDS, HP's revenue grew 5 percent, or 2 percent when adjusted for currency effects.

HP's solid guidance comes as many other bellwethers in the technology sector are hunkering down because consumers are businesses are putting off spending on PCs and other equipment. Research firm IDC recently cut its prediction for growth in worldwide information technology spending to 2.6 percent in 2009, down from its earlier forecast of a 5.9 percent increase.