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HP posts another solid quarter

Growth in notebook sales again leads the way for the computer maker, which beat Wall Street estimates for the third quarter with $2.03 billion in earnings.

Hewlett-Packard beat Wall Street earnings estimates this quarter, lead by strong notebook sales growth.

HP reported third-quarter earnings of $2.03 billion, or 86 cents per share, excluding one-time charges. Analysts were expecting earnings of 83 cents per share. The company's third-quarter results reflect 14 percent growth over the same quarter a year ago, when HP reported earnings of $1.78 billion and 66 cents per share.

There were fears leading up to the announcement that slowing demand for PCs in Western nations and a strengthening dollar could mean HP had peaked this year already. But HP is forecasting 95 cents to 97 cents per share for the fourth quarter, and for the full year predicts earnings of $30.2 to $30.3 billion. None of that takes into account the company's acquisition of EDS.

HP Chairman and CEO Mark Hurd batted away reporters' repeated questions about whether he saw any weakening demand for PCs in the US or globally. He would only allow that "We didn't see much of a change from Q2 to Q3."

The US accounts for roughly 30 percent of HP's sales, but Hurd declined to talk about the specific dynamics of international global markets. He described Europe as "a mixed bag" when it came to growth opportunities for his company, and said there was some strength in Asia as well.

Either way, all sectors of HP's business grew last quarter. The Personal Systems Group, which is responsible for the laptop and desktop business, grew sales 15 percent in the last year. Notebook sales increased 26 percent since the same quarter a year ago, and the company remains the top PC provider worldwide.

The Imaging and Printing Group--which is trying to compete in a world where people no longer print photos or documents like they used to--was hit and miss. While year-over-year revenue was up 3 percent, consumer hardware sales (that's printers, cameras, etc.) were down 14 percent. But supplies, which refers to ink and toner cartridges, increased 11 percent in the last year.

Software and servers also helped push up HP's numbers: blades revenue was up 66 percent, and software revenue increased 29 percent to $731 million this quarter.