Nov. 19 (Bloomberg) -- Hewlett-Packard Co., the biggest personal-computer maker, forecast sales and profit that beat analysts' estimates after notebook PC sales helped extend the company's lead over Dell Inc.

Profit this quarter will rise to 80 cents a share on sales of $27.4 billion to $27.5 billion, Hewlett-Packard said today in a statement. Analysts had estimated earnings of 78 cents and revenue of $27 billion, according to a Bloomberg survey.

Chief Executive Officer Mark Hurd, who cut 15,000 jobs and closed offices to buoy earnings since taking over in 2005, is winning sales of PCs, printers, software and server computers. Lower prices for components, such as memory, also boosted profit. The company, whose stock reached a seven-year high this month, said today it will buy back as much as $8 billion in shares.

``They consistently beat their guidance numbers, so that makes you feel comfortable they aren't seeing any major air pockets in the economy, especially in financial services,'' said Chuck Jones, an analyst at Atlantic Trust in San Francisco. ``Mark Hurd just continues to execute very well.''

Fourth-quarter net income rose 28 percent to $2.16 billion, or 81 cents a share, from $1.7 billion, or 60 cents, a year earlier, the Palo Alto, California-based company said in the statement. Excluding some costs, profit was 86 cents a share, exceeding analysts' estimates for the 11th straight quarter.

Sales rose 15 percent to $28.3 billion in the period, which ended Oct. 31. That beat Hewlett-Packard's forecast by more than $1 billion. Analysts had projected sales of $27.3 billion and profit of 82 cents.

Passing IBM

Hurd, 50, has topped his forecasts in each quarter since succeeding Carly Fiorina. He also delivered on a goal to surpass $100 billion in annual sales for the first time, with revenue tallying $104.3 billion for the year. That makes the company the world's largest producer of computer technology, beating International Business Machines Corp. for the second year.

``We are not trying to give guidance that is low -- we are giving guidance that predict substantive improvement in performance,'' Hurd said in an interview. ``What's important for us is that we give realistic estimates and we believe those estimates.''

Hewlett-Packard, also the world's biggest printer maker, rose as much as $1.31, or 2.7 percent, to $50.75 in extended trading after the report. The shares had fallen $1.31 to $49.44 at 4 p.m. on the New York Stock Exchange. The stock, which has gained 20 percent this year, reached its seven-year high on Nov. 6, the 50th anniversary of the company's initial public offering.

`Boring Story'

``Very good numbers from H-P,'' said Daniel Renouard, an analyst at Robert W. Baird & Co. in Milwaukee. ``This has kind of become almost a boring story as they continue to beat both top and bottom line.''

While a slowdown in spending by U.S. financial-services companies is cutting into sales at IBM and Cisco Systems Inc., such customers don't represent ``a significant industry'' for Hewlett-Packard, Hurd said on a conference call. ``We have limited exposure to the financial-services market.''

Looking at the overall economy, Hurd said he sees a ``fairly steady environment.''

The latest share repurchases will add to the $2 billion in buybacks that Hewlett-Packard made last quarter. The company has $2.7 billion remaining in an existing buyback program.

PC Market

Hurd has leaned on a network of more than 100,000 retailers to help sell PCs, particularly the notebook models favored by consumers. In the calendar third quarter, Hewlett-Packard's shipments rose 17 percent in the U.S., the world's biggest market for PCs, according to research firm IDC in Framingham, Massachusetts.

U.S. shipments at Dell, the second-largest PC maker, fell 4.8 percent, IDC said. Michael Dell, who returned as CEO in January, has added retail partners such as Wal-Mart Stores Inc. to try to win back consumers. His Round Rock, Texas-based company reports results Nov. 29.

Hewlett-Packard's PC sales rose 30 percent last quarter to $10.1 billion after unit shipments jumped 31 percent. Notebook sales climbed 49 percent, while desktop-computer revenue increased 15 percent. Earnings at the PC unit rose 75 percent to $589 million. The profit margin, or profit as a percentage of sales, widened to 5.8 percent from 4.3 percent.

Prices for computer components may be ``moderately less favorable'' this quarter, Chief Financial Officer Cathie Lesjak said on the conference call.

`Tremendous Opportunity'

To bolster returns in software, Hurd has spent more than $6.5 billion on six acquisitions. That's helped turn a money- losing unit two years ago into Hewlett-Packard's fastest-growing business. Software revenue doubled to $698 million last quarter. The division made $177 million in operating profit.

Sales of printers and supplies such as ink rose 4 percent to $7.6 billion. Profit increased 1.3 percent to $1.09 billion. The profit margin narrowed to 14.5 percent from 14.8 percent a year ago because of costs stemming from the company's decision earlier this month to stop making digital cameras and seek an outside manufacturer.

``There is a tremendous opportunity out there,'' Hurd said. ``Today, we're just not as effective at getting to all of those buyers as we'd like to be.''

To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

Last Updated: November 19, 2007 20:25 EST