Aug. 19 (Bloomberg) -- Hewlett-Packard Co., the world's largest personal-computer maker, reported a 14 percent increase in third-quarter profit, beating analysts' estimates, as international demand and new notebook designs spurred sales.

The shares rose as much as 4.4 percent after Hewlett-Packard said net income rose to $2.03 billion, or 80 cents a share. Excluding acquisition costs, profit was 86 cents, exceeding the 84 cents anticipated by analysts in a Bloomberg survey. A profit forecast for the fourth quarter also topped estimates.

Computer sales rose 15 percent after Chief Executive Officer Mark Hurd introduced sleeker designs and metallic finishes to sell more notebooks. Hewlett-Packard, which took the lead in the PC market from Dell Inc. two years ago, also benefited from a 24 percent revenue gain in Brazil, Russia, India and China.

``It's the broadness of their portfolio and international mix that allows them to do better than Dell,'' said Shaw Wu, an analyst at American Technology Research in San Francisco. ``These results are quite strong.''

Hewlett-Packard, based in Palo Alto, California, rose $1.91 to $45.60 in extended trading after closing at $43.69 on the New York Stock Exchange. The shares had declined 13 percent this year, compared with a less than 1 percent drop for Round Rock, Texas-based Dell.

Third-quarter sales rose 10 percent to $28 billion, compared with the average estimate of $27.4 billion by analysts. Excluding the effects of currency translation, sales advanced 5 percent in the quarter ended July 31. Sales gained 4 percent in the Americas; 16 percent in Europe, the Middle East and Africa; and 14 percent in Asia Pacific. Revenue from outside the U.S. accounted for more than two-thirds of sales.

`Significant Opportunity'

``You've got a lot of places around the planet where the only access to the digital content out there is through a notebook and a wireless card,'' Hurd, 51, said on a conference call with reporters. ``We have a significant opportunity.''

For the fourth quarter, sales will be $30.2 billion to $30.3 billion, and profit, excluding some costs, will be $1.01 to $1.03 a share. Analysts surveyed by Bloomberg had anticipated $30.3 billion in revenue and $1 a share in profit.

The forecast is based on currency rates from the beginning of this month, Chief Financial Officer Cathie Lesjak said on a call with analysts. A strengthening U.S. dollar could put ``downward pressure on revenue'' this quarter, she said.

``There will be some impact from a stronger dollar, but as you can see from our guidance for the fourth quarter, it's not enough to really be noticeable,'' she said.

Hurd's Record

Hurd has beaten analysts' profit estimates in every quarter since he took over in April 2005. The company recaptured the PC- market lead in 2006 after trimming prices to compete with Dell, and selling notebooks through about 80,000 retailers in the U.S.

``It's heartening to see an industry and a major player reporting good results,'' said Michael Cuggino, portfolio manager at Pacific Heights Asset Management LLC in San Francisco, which owns about 370,000 shares of Hewlett-Packard. ``H-P continues to execute.''

The company had 19 percent of worldwide PC shipments in the second calendar quarter, compared with Dell's 16 percent, according to researcher IDC in Framingham, Massachusetts. Still, Dell posted a 21 percent increase in PC shipments, outpacing Hewlett-Packard's growth for the second quarter in a row.

PC Shipments

Hewlett-Packard said today that third-quarter PC shipments rose 20 percent, with notebook revenue gaining 26 percent from a year ago and desktop revenue rising 6 percent.

Dell CEO Michael Dell is now copying Hewlett-Packard's retail strategy, selling machines through more than 13,000 stores. Dell also overtook Hewlett-Packard in customer satisfaction last year, according to a University of Michigan survey released today. Dell took second place behind Apple Inc. by adding new customer-support features.

``There's a ton of folks out there trying to compete,'' Hurd said. ``Our numbers show up quite well.''

A year ago, the company reported profit of $1.78 billion, or 66 cents a share.

Sales of printers and supplies such as ink rose 3.4 percent to $7 billion. Revenue from supplies increased 11 percent, while printer shipments fell 2 percent from a year earlier. That decline is a result of the company's focus on more profitable printers, Hurd said.

Software Sales

Hurd is expanding Hewlett-Packard's other businesses, spending more than $6 billion over the past three years to boost the software unit. Software sales rose 29 percent to $781 million in the third quarter.

Revenue from services, such as consulting and outsourcing, jumped 14 percent to $4.75 billion. Hewlett-Packard is buying Electronic Data Systems Corp. for $13.2 billion to step up competition with International Business Machines Corp. in computer services.

The deal, which Hurd said will close this month, is Hewlett- Packard's biggest since the 2002 buyout of Compaq Computer Corp. for $18.9 billion. There are 500 Electronic Data and Hewlett- Packard employees working on the integration team, he said.

The company will hold a meeting for analysts on Sept. 15 to discuss its overall business and the acquisition.

``Generally all of the groups are firing,'' Roger Kay, president of Endpoint Technologies Associates Inc., a market research firm in Wayland, Massachusetts, said in a Bloomberg Radio interview. ``The portfolio balances out very nicely.''

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

Last Updated: August 19, 2008 19:13 EDT