This is a partial transcript from "Your World with Neil Cavuto," November 17, 2004, that was edited for clarity.

NEIL CAVUTO, HOST: Technology heavyweight Hewlett-Packard (search) shares hitting the ball right out of the park Wednesday with its biggest gain in a couple of years, this after reporting much stronger than expected earnings, up 27 percent in the latest period.

Is it a sign that the market means business and that tech means business once again? Let us ask Carly Fiorina (search), the chairman and the CEO Of Hewlett-Packard. She joins us right now from California.

Very good to have you, Ms. Fiorina, thank you.

CARLY FIORINA, CHMN. & CEO, HEWLETT-PACKARD (HPQ): Nice to see you, Neil.

CAVUTO: Let's talk a little bit about what was going on at your company, a big turn around from folks who were disappointed a quarter ago. What changed?

FIORINA: Well, a couple of things. First we executed better. We had some very specific execution issues in the third quarter, which we were pretty open and forthright about. We said we could turn those around in the quarter, and we did.

And we also had very good demand for our products across the board. So we produced record revenues in every business in every region and very balanced profitability across the board.

CAVUTO: Indeed it was across the board. The personal computer business up three percent, commercial sales up 12 percent, consumer sales up four percent. Do you think it's looking like a good holiday?

FIORINA: Well, you know, it's interesting. A year ago, if we looked into the economy, we saw consumers quite strong and enterprise relatively weak. This year we see enterprise strengthening. I would call the consumer environment not weak, but not spectacular either. Kind of a so-so holiday season at this juncture.

CAVUTO: What is so-so year over year?

FIORINA: Well, I don't know how I could get more exact than that. A number of retailers commented in the August-September-October period that things were maybe not as strong as they had hoped.

We certainly haven't gone into the all-important Thanksgiving selling season, which is really when the Christmas season starts in earnest.

CAVUTO: Yes.

FIORINA: But I would say based on what we're seeing today, it's OK, but it's not spectacular.

CAVUTO: Are you worried, Carly, about — I guess your printer and imaging business, that was up about five percent. Correct me if I'm wrong...

FIORINA: It's up five percent, yes.

CAVUTO: All right. That's gotten to be a real commodity war. I know Dell's getting into the business. Others have these so-called no-name brands. Does it mean that the cost constraints are going to be such that your profitable margins there are going to slip-slide away?

FIORINA: Well, actually, it is not a commodity business for us, although certainly there are many low cost printers in the market. This is a very R&D and capital-intensive business, and our strategy is to continue to innovate, to stay ahead of the markets.

So in fact in this first quarter, we not only delivered record revenues in our imaging and printing business, we also delivered record profits. And at 16.6 points of operating margin in imaging and printing, that is absolutely best in class profitability performance in the industry, and we intend to continue that.

Now, as we go into the first half of '05, we may modulate our best in class profitability down a little bit, and increase our growth a little bit, but we intend to continue to remain the leader and the benchmark in this industry.

I would also just quickly add that in the fourth quarter, we delivered into the marketplace about 14 million printers. That is an all-time record in terms of hardware volume for the quarter: 5 million printers in the month of October alone.

Dell, by contrast, their plan is to do about five million in a year. And unlike some of our competitors, we don't give them away. We charge for them.

CAVUTO: Now, meanwhile, one giveaway for you, and a lot of companies that do business abroad, has been the weakening dollar. Is it fair to say that if the dollar had not been as weak as it has been, and continues to get, that you would be in a bigger pickle?

FIORINA: No. I don't think that's fair. Certainly, currency helps revenue, without a doubt. On the other hand, it pressures expenses.

I think it's also true that all of technology operates in this environment, so it doesn't particularly impact hue let Packard differently than it impacts anyone else. We do have hedging strategies that we employ.

So, all of that has to be taken into account. But in general, it is true that a weakening dollar has upside on revenue and downside pressure on expenses. But even adjusting for the effects of currency, this was a very solid growth quarter across the board, and around the world.

CAVUTO: All right, Carly, if you'll indulge me, I'm going to go into rumors now, OK?

FIORINA: OK.

CAVUTO: One rumor is that the president is looking at you very seriously to be his commerce secretary to replace Don Evans, who's leaving. Is that true?

FIORINA: Well, you know, last time I was on the show, you asked me about politics or something like it, as well.

CAVUTO: Well, you're a big Republican. You've been a big supporter of the president. You don't hide that.

FIORINA: I have a job to do at Hewlett-Packard right now, and that's the job that I'm doing.

CAVUTO: All right. But if the president were to call you up and say, "Carly, I want be my commerce secretary."

FIORINA: Well, I don't think that's likely to happen, but right now, I've got a job to do.

CAVUTO: OK. What about these other rumors that surface about taking over Disney?

FIORINA: I haven't heard that one. I should come you to more often.

CAVUTO: All right. See? It's just gossip and I'm running with it.

FIORINA: Chairman and CEO Of Hewlett-Packard is a wonderful job. It's the job I'm doing right now, and it's the job I need to do right now.

CAVUTO: All right. During the campaign, speaking of things political, the issue of outsourcing came up. And you tried to put it in some perspective.

Those who are familiar with your company and where this has become a thorny issue have said that it was almost heartless, your view of this. How do you assuage people who think that you don't look at outsourcing as a problem?

FIORINA: Well, first, let me put all of this into context.

There is no question that when people lose a job, that is a tremendously difficult thing. It's difficult for the individual. It's difficult for their family. It's difficult for the community.

It is also true that this country, as a country, has been engaged in what I would call comparative advantage for 200 years. And what that really means is that we're always focusing on what are the things that we do best? And what are things that others do better?

Hewlett-Packard, just as an example, has engaged in a long-time strategy of outsourcing various activities from inside Hewlett-Packard to other companies. That's been going on in this company for 40 years. It is a way of continuing to add value and be efficient.

The United States is now competing on a global stage. The United States is now competing against nations that we didn't have to compete against ten years ago or so. And so, what we as a nation need to do is always think about how do we add more value so that we continue to be the leading economy in the world. I have great confidence in our ability to do that.

But my point is that a nation, like a company, has to think about its competitiveness. And always be thinking about what do we do best, that others cannot do as well?

CAVUTO: So John Kerry just made it a red herring?

FIORINA: No, it's not a red herring in the sense that it impacts communities in a real way.

But I think that, on the other hand, we are not doing this nation or our citizens or ourselves or our communities a favor if we are not realistic and honest about what it takes for this nation to continue to be a leader economically. And that is in all of our interests.

CAVUTO: All right. Carly Fiorina. Next time I want to chase down gossip and rumors with you you're welcome back. Thank you very much.

FIORINA: Thanks.

CAVUTO: Very good to have you. Carly Fiorina, the chairman and CEO Of Hewlett-Packard, joining us out of California.

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