Hewlett-Packard's quarterly results beat expectations and it raised its full-year earnings outlook on demand for personal computers and servers as well as a resurgence in its printing business.
Shares in the company, whose sales had a surprise rebound in Europe, jumped nearly 3 per cent after-hours.
Analysts say the world's largest technology company by sales is poised to ride an expected surge in corporate spending in 2010 as businesses replace aged equipment.
HP reported an 8 per cent jump in fiscal second-quarter revenue from its printing division, double the growth in the first quarter. The division accounts for about one-fifth of HP's revenue but a third of operating profit.
Higher-margin revenue from printing supplies climbed 6 per cent from 1 per cent previously.
Addressing concerns from analysts about a slight slowdown on unit sales of laser printers in the quarter, the company said demand is "very strong", adding that it expects double-digit unit growth for both inkjet and laserjet printers for the year.
The company is now forecasting a profit, excluding items, of $4.45 to $4.50 a share in fiscal 2010, up from a previous target of $4.37 to $4.44. That was in line to slightly stronger than Wall Street's average forecast for $4.45.
Underscoring how corporate budgets are starting to loosen, HP's revenue from industry-standard servers leapt 54 per cent.
Analysts said growth in corporate-oriented businesses should help offset some of the impact from a weakening European currency. The company gets some three-fifths of its revenue from outside the United States.
"HP's increased revenue and EPS guidance will help alleviate investor concerns about the potential impact from euro weakness and dilution from recent acquisitions," said Cross Research analyst Shannon Cross.
Chief financial officer Cathie Lesjak said the company is outperforming its peers and not simply riding the wave of overall US economic recovery.
"The share gains that we had in the industry standard server (market) is pretty impressive," she said. "And that shows that we are doing better than just the economic recovery would suggest."
Ms Lesjak added that HP remained on the prowl for appropriate acquisitions in the wake of its purchase of ailing smartphone maker Palm Inc for $1.2 billion.
HP reported a net profit of $2.2 billion, or 91 cents a share, in the fiscal second quarter ended April 30, up from $1.7 billion, or 71 cents a share, a year ago.
Excluding items, profit was $1.09 a share. Analysts on average had expected $1.05 a share.
Net revenue rose 13 per cent to $30.8 billion, compared with Wall Street's forecast of $29.8 billion.
Shares of HP rose to $48.15 in extended trading after closing at $46.79.
HP shares are down about 8 per cent for the year.
Reuters