Computer and printer maker Hewlett-Packard Co. on Tuesday posted a fiscal first-quarter profit that topped expectations, driven by cost cutting and a narrower operating loss in its enterprise computing business, but sales came up short.

Hewlett-Packard (HPQ), the No. 2 computer maker after International Business Machines Corp. (IBM), also affirmed Wall Street consensus estimates of 27 cents a share before items, taking into account normal seasonal revenue patterns, for its current, second quarter.

The company's revenue of $17.9 billion for the quarter, a decline of 1 percent from the prior quarter, was below analyst consensus expectations for sales of $18.48 billion, according to research firm Thomson First Call. Year-ago revenue, excluding that of Compaq, which it acquired in May, was $11.4 billion.

HP's personal computer business, which it calls its personal systems group, returned to profitability ahead of schedule, swinging to an operating profit of $33 million from a fourth-quarter loss of $68 million. Investors have been keen on when that unit would return to the black.

"It's a big step forward," said Bob Wayman, HP's chief financial officer, in a telephone interview.

At the same time, HP's ability to gauge future demand, often referred to as visibility, remains muted, due to the uncertain economy and geopolitical uncertainty, he said.

"The visibility is obviously poor," Wayman said. "The U.S. (market) has disappointed us. Frankly we had been hopeful for a little better outcome there."

"Europe has surprised us (positively)," Wayman said. "But how much of that is the psychology of the (possible) war or concerns about whatever, I'm not really in a position to say."

Palo Alto, California-based HP said that it had revenue shortfalls in the United States, where commercial spending continued to be weak and revenues fell 7 percent from the fourth quarter.

Revenues outside of the United States were up 3 percent from the fourth quarter due to strength in Europe and Asia-Pacific, it said.

Sales of enterprise systems, which are large computers used by corporations, fell to $3.7 billion, a 6 percent decline from the fourth quarter, due to soft demand in the United States and Latin America. The division's operating loss was $83 million.

Sales in its imaging and printing group, the current profit engine for HP, totaled $5.6 billion, flat from fourth quarter levels, following a seasonally strong fourth quarter. Sales in that group reflect what HP said were strong sales in digital imaging, home printers and ink-cartridge sales, offset by weakness in big-business spending on technology.

Sales of personal systems, which includes personal computers, were $5.1 billion, a 2 percent increase from the fourth quarter.

"They certainly need to continue to look at costs in PSG (Personal Systems Group) and enterprise systems," said Peter Kastner, chief research officer at market research firm Aberdeen Group. "They can do even better in services."

For the quarter ended Jan. 31, HP said it had net income of $721 million, or 24 cents a share. In the year-ago quarter, HP's net income, excluding results from Compaq, was $484 million, or 25 cents a share.

Excluding a number of items, HP reported a profit of $877 million, or 29 cents a share, compared with expectations among analysts polled by First Call for a profit of 26 cents to 30 cents, with the consensus a 28-cent profit.

"Both their PC and their enterprise divisions are moving in the right direction," said Martin Reynolds, an analyst at market research firm Gartner Group. "These are two business units that really have to stand up against Dell in the marketplace.

HP has been jockeying with Dell Computer Corp. (DELL) for the lead in global sales of PCs.

Hewlett-Packard shares closed on Tuesday at $18.17, up 42 cents, or 2.4 percent. Its shares have gained 5 percent so far this year, while the broader American Stock Exchange Computer Hardware index has lost 6 percent.