Shares of Hewlett-Packard Co. (NASDAQ: HPQ) soared in after hours trading after the world's largest computer company reported better-than-expected fiscal first quarter profit and gave bullish guidance. No, ladies and gentlemen, you aren't seeing things.

Net income at the Palo Alto, Calif.-based company rose 38% to $2.13 billion, or 80 cents per share, from $1.55 billion, or 55 cents, a year earlier. Excluding one-time items, profit was 86 cents, beating the 81-cent consensus forecasts of analysts surveyed by Thomson Financial. Net revenue soared 13% to $3.4 billion.

"We are raising our guidance yet again, reflecting our confidence in anticipated cost reductions and share gains in key markets," said Mark Hurd, HP chairman and chief executive officer, in the earnings release. "We added more than 2,000 sales positions in the past year through acquisitions and hiring. HP remains well positioned for profitable growth as we continue to focus on our numerous cost initiatives and improve our market coverage."

The company forecast second quarter revenue of $27.7 billion to $27.9 billion. Profit is expected to be 77 cents to 78 cents on a GAAP basis and 83 cents to 84 cents on a non-GAAP basis. Hewlett expects to earn $3.26 to $3.30 this year on a GAAP basis and $3.50 to $3.54 excluding some costs. Revenue is seen at $113.5 billion to $114.0 billion.

As Bloomberg News noted, "Hurd, 51, has topped his profit forecasts in each quarter since succeeding Carly Fiorina in April 2005." Everything went his way in the quarter. Heck, revenue in the Americas grew a respectable 8% to $11.2 billion. Operating margins grew to 9.2% and profit margins rose to 5.8%.

All of H-P's success has come at Dell Inc. (NASDAQ: DELL)'s expense. This only underscores the huge challenge Michael Dell has in turning around the company he founded.

Freelance writer Jonathan Berr edits the blog Ketchup and Eggs.