HP Crushes Estimates

HP gave hope to a battered stock market with much better than expected results after the close on Tuesday.

HP’s pro forma quarterly earnings of 36 cents a share were a nickel better than Wall Street analysts were expecting, and revenues rose 10% to $20.76 billion, also ahead of forecasts. HP raised guidance for its fiscal fourth quarter to 44-47 cent earnings and $22.4-$22.8 sales.

The company’s results were driven by a 20% jump in notebook, server and storage sales, as the company overcame a 3% decline in desktop revenues.

“We executed well in the third quarter with double-digit revenue growth, solid margin improvements in key segments and strong cash flow,” CEO Mark Hurd said in a statement. “I’m encouraged by what we have achieved to date, and we are focused on driving further performance improvements.”

The company offered little detail on its planned 10% workforce reduction except to say that it will begin with a voluntary retirement program for U.S. employees. 

Shares of HPQ jumped 6% after hours.

Also after the close, Applied Materials rose 3% after the chip equipment maker beat earnings estimates and raised order guidance.

Stocks were battered during the day after consumer inflation came in stronger than expected and retail earnings were weaker than expected. Warnings from Wal-Mart and Gateway hit stocks hard. Wholesale inflation will be reported Wednesday morning.

The Nasdaq tumbled 30 to 2137, the S&P fell 14 to 1219, and the Dow slid 120 to 10,513. Volume rose to 1.8 billion shares on the NYSE, and 1.55 billion on the Nasdaq. Decliners led 23-10 on the NYSE, and 22-10 on the Nasdaq. Downside volume was 83% on the NYSE, and 73% on the Nasdaq. New highs-new lows were 60-27 on the NYSE, and 63-44 on the Nasdaq.

Gateway plunged 20% after the company missed estimates and warned.

Sonic Solutions jumped 12% on its results.

InterVideo plummeted 23% on a patent dispute with Dell .