HP Rolls On

HP beating Wall Street estimates has become a given in the last couple of years, which perhaps explains why investors sent HP shares 1% lower late Tuesday after the company exceeded forecasts once again.

HP’s first-quarter sales rose 11% to $25.1 billion, $800 million ahead of forecasts, while earnings of 65 cents a share were 3 cents better than analysts expected. HP’s first quarter and full-year sales forecasts were also above views ($24.5 billion and $98-$99 billion, respectively).

“HP delivered a strong first quarter, with improved margins and solid revenue growth across our businesses,” HP chairman and CEO Mark Hurd said in a statement. “We have a lot of work and opportunities ahead of us. I am confident we can continue to execute with discipline and deliver a year of strong financial returns.”

The company’s strongest sales were overseas, with sales in the Americas growing just 6%. Notebook sales were up 40%, while desktop sales declined 1%. Consumer personal sales drove HP’s computer results, up 28% compared to 8% growth in commercial sales.

Imaging and printing sales were up 7% and storage and servers and services revenues rose 5%. Software sales were up 81% — thanks to the acquisition of Mercury — and operating margins increased in every business unit except financial services. There was some concern about rising inventories, however.

HP also announced an early retirement offer and plans to freeze its defined benefit pension plan.

Stocks rose during the day, as upbeat comments from a Federal Reserve official and solid results from Wal-Mart overcame weak numbers from Home Depot.

XM and Sirius rose on news that the two plan to merge, although gains were restrained by fears that the deal won’t clear regulatory hurdles. Brightpoint gained on its acquisition plans.

Chip equipment stocks got hit by a Credit Suisse downgrade, weighing on shares of Applied Materials and Lam Research , among others.

SanDisk ended the day higher after initially falling on news of pricing cuts and cost-cutting measures.

Alltel , Vasco and Vital Images gained on their quarterly results, while Cincinnati Bell Intermec lost ground on a warning.

The Nasdaq rose 17 to 2513, the S&P 500 gained 4 to 1459, and the Dow added 19 to 12,786. Volume declined to 2.37 billion shares on the NYSE, but rose to 2.24 billion on the Nasdaq. Advancers led 20-12 on the NYSE, and 20-10 on the Nasdaq. Upside volume was 61% on the NYSE, and 73% on the Nasdaq. New highs-new lows were 391-16 on the NYSE, and 257-37 on the Nasdaq.