Hewlett-Packard Co. (HPQ) shares rose more than 4 percent Wednesday as investors reacted to its report a day earlier that earnings rose 26.5 percent in the fourth quarter, led by record revenue growth across all of the computer giant's business units, particularly in its consumer electronics division.

Shares of the Palo Alto, Calif.-based HP were up 89 cents, or 4.5 percent, to $20.57 Wednesday on the New York Stock Exchange (search) . Its shares are trading midway betrween their 52-wek range of $16.08 to $26.28.

HP said after the markets closed Tuesday that it earned $1.091 billion, or 37 cents per share, in the quarter ended Oct. 31 compared with $862 million, or 28 cents per share, in the same period last year. Wall Street analysts had been expecting the company to earn 37 cents a share, according to Thomson First Call. Revenue came to $21.39 billion, up 8 percent from $19.85 billion in the fourth quarter of 2003.

Excluding special items, HP 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.

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

"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 (search), HP'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 also benefitted from the dollar being down against the euro, said Carl Claunch, vice president of research firm Gartner Inc.

"It sounds like a great recovery," Claunch said. "But if you do the math and get under the numbers, you see (revenue is) 4 percent."

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

HP'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. HP 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, HP added 4,000 employees in the fourth quarter, for a total of 150,000 worldwide, Fiorina said.

HP 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, HP's net revenue was $79.9 billion, up $6.8 billion.