updated 11/16/2004 7:51:19 PM ET 2004-11-17T00:51:19

Hewlett-Packard Co. reported Tuesday a 26.5 percent rise in fourth-quarter profit on the strength of record revenue growth across all of the computer manufacturing giant’s businesses.

For the three months ended Oct. 31, H-P reported a net income of $1.091 billion, or 37 cents per share, compared with $862 million, or 28 cents per share, in the same period last year.

Fourth-quarter revenue was $21.39 billion, up 8 percent from $19.85 billion in the fourth quarter of 2003.

Excluding special items, H-P earned $1.2 billion, or 41 cents per share. That compared with $1.1 billion, or 36 cents per share, in the same period of 2003.

Analysts had been expecting Palo Alto, Calif.-based H-P to earn 37 cents a share for the latest period, according to Thomson First Call.

The company said the non-GAAP figures include an adjustment of $136 million, or 5 cents per share.

H-P released its results after the close of markets.

“After a challenging third quarter I am pleased with the steady improvement we made in (the quarter) and the way we ended the fiscal year,” Carly Fiorina, H-P’s chairman and chief executive, said during a conference call with Wall Street analysts.

“We were solidly profitable in all of our businesses except software which delivered a significant year over year profit improvement and approached break even,” she said.

The company’s software, storage server and services division reported a combined $8 billion in revenue, up 10 percent from the previous year period.

H-P’s personal computer business generated $6.5 billion in revenue, a 9 percent increase, with commercial sales growing 12 percent while consumer sales rose 4 percent, the company said.

The company’s imaging and printer unit saw record quarterly revenue of $6.5 billion, up 5 percent over the same period last year. H-P shipped 14 million printers during the quarter, a record, the company said.

Business hardware revenue grew 6 percent over the same quarter a year ago on strong sales of color laser, multi-function printers and digital press.

Home hardware revenue declined 2 percent amid fewer sales of single-function printers and lower prices, the company said.

Fiorina said the company expected consumer purchasing during the holidays would be “not bad, but not spectacular.”

That outlook is the reverse of the 2003 holiday season, where business spending was down compared to individual shoppers.

“We saw a stronger consumer market and a weaker enterprise market,” Fiorina said. “At this juncture what we’re seeing is an improving enterprise market and a so-so consumer market.”

The company spent $859 million on research and development in the quarter, down from the $907 million it spent in the same quarter of 2003.

Despite stated efforts to reduce its work force, H-P added 4,000 employees in the fourth quarter, for a total of 150,000 worldwide, Fiorina said.

H-P estimated that revenue in the first half of fiscal 2005 would be between $41.8 billion and $42.3 billion, with non-GAAP earnings per share between 72 cents and 74 cents.

For the year, H-P’s net revenue was $79.9 billion, up $6.8 billion or 9.3 percent.

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