HP's profits are racing ahead

The newly-merged computer maker said it had a net profit of $659m (�401m), or 22 cents a share, for the three months to the end of April.

The company also delighted investors by saying it would meet analyst estimates for its fiscal year.

The double dose of good news sent HP shares soaring in after-hours trade.

Merger savings

Figures for the same quarter a year ago were not available, as the company had not completed its merger with rival Compaq.

Sales were $18bn, down slightly from last year's combined figure of $18.2bn but up slightly from the $17.9bn reported in the first quarter.

HP chief executive Carly Fiorina said: "Today, HP emerges from the integration a stronger, bolder competitor with our sights set firmly on leadership and growth."

HP rivals Dell and IBM have both reported strong revenue growth in recent weeks.

HP completed its merger with Compaq in May 2002.

At the time, doubts were cast on the two companies' ability to mesh effectively - or generate the kind of cost savings promised during the prolonged battle over the deal.

But Ms Fiorina said the combined company has reduced structural costs by $3.5bn annually.

The results were announced after the markets closed.

HP shares closed at $17.05, up 17 cents, in Tuesday trading on the New York Stock Exchange.