If HP and Compaq had been a single entity a year ago, the companies' combined results would have yielded a loss of US$505 million.
HP said that had one-off charges been excluded, earnings would have risen from 13 cents per share to 24 cents per share for the fourth quarter. Analysts polled by Thomson First Call had predicted a result of 22 cents per share for the period, on revenue of US$17.3 billion.
The result is seen as a justification for the HP execs that steered the company into its merger with Compaq.
"We think we are right where we need to be," said Robert Wayman, HP's chief financial officer. "We still have a lot of work to do, but we have made a lot of progress in the first six months. I think we are even running a little ahead of schedule."
However, industry watchers say it is still to early to call the merger a success. "The merger and the turmoil that emerges from it is not over. It's going to take at least another year before we really know how this is working, said Meta Group analyst Steve Kleynhans.
HP's printer division fuelled the Q4 result, making an operating profit of US$926 million on revenue of ofUS$5.6 billion. However, the PC division continued to struggle, posting an operating loss of US$87 million on revenue of US$5.05 billion.
Consumer sales were down 13 percent on the same period a year ago, HP said, while business sales held flat.
HP had eliminated 12,500 post merger jobs, or 2,500 more than management had predicted. HP plans to cull another 5,400 positions in 2003, or 25 percent more than the company had predicted just three months ago.
HP said the job cuts had cut the company's overheads by US$651 million.
Following the results, shares in HP climbed nine percent to US$18.40 in after hours trading in New York.