SAN FRANCISCO - Hewlett-Packard Co. started its fiscal year with a first-quarter profit above analyst expectations and predicted its performance will improve in the months ahead, providing a ray of hope in the gathering economic gloom.
The Palo Alto-based maker of computers and printers said Tuesday that it earned $2.13 billion, or 80 cents per share, for the three months ended in January. That represented a 38 percent increase from net income of $1.55 billion, or 55 cents per share, in the same period a year earlier.
If not for expenses stemming from past acquisitions, HP said it would have earned 86 cents per share. That figure exceeded the average estimate of 81 cents per share among analysts surveyed by Thomson Financial.
Revenue for the period totaled $28.5 billion, a 13 percent increase from the previous year. Analysts, on average, had forecast revenue of $27.6 billion.
Management also painted a rosy picture for the rest of the fiscal year ending in October. Excluding certain one-time expenses, HP expects to earn from $3.50 to $3.54 per share, outstripping the previous analyst estimate of $3.36 per share, according to Thomson Financial.
The upbeat forecast, coupled with the strong first quarter, impressed investors. HP shares surged $2.31, or 5.3 percent, in Tuesday's extended trading after gaining eight cents to finish at $43.95 in the regular session.
As it has in past quarters, HP is benefiting from rising computer sales and steady cost cutting dictated by Mark Hurd, who took over as the company's chief executive nearly three years ago.
Since Hurd's arrival, HP's market value has nearly doubled, creating $50 billion in shareholder wealth, while the company surpassed rival Dell Inc. to become the world's top seller of personal computers.
Shipments in HP's computer division climbed 27 percent in the first quarter.
The company's biggest moneymaker remains the ink in the cartridges in its computer printers. HP's imaging and printing group posted an operating profit of $1.15 billion in the first quarter, a 7 percent increase from the previous year.