Hewlett-Packard has upped its earnings estimates following higher-than-expected sales of PCs and peripherals.
HP expects to report earnings per share at a level "substantially above" current analyst estimates of 16 cents.
The company revealed that the revised estimate is "based on an uptick in consumer demand" that has affected its hardware lines.
When HP reported fourth-quarter 2001 earnings of $10.9 billion in November, it said that it expected first-quarter results to be down slightly on this, basing its prediction on normal seasonal trends.
But increased hardware sales, combined with continuing cost-savings measures, means HP now expects increased gross margins with expenses approximately flat with fourth quarter levels.
Carly Fiorina, HP's chairman and CEO said: "Economic conditions around the world continue to be challenging, but consumer technology spending is clearly showing some strength.
"As a result, we are seeing better than expected revenues in our PC and imaging and printing businesses. We are not relenting on the expense side and continue to take decisive actions to improve our cost structure. We remain convinced that we're up to the task of successfully integrating Compaq and creating a powerful new HP."
First-quarter results will be reported in a conference call with analysts after the stock market closes February 13.
Late last month, HP's merger target, Compaq also announced that it had beaten analyst expectations for the fourth quarter and that it was raising its earnings estimates for 2002.