The earnings beat analysts' expectations and marked a slight recovery from three months ago, when the company reported its first quarterly loss.

Operating earnings of $131 million, or 14 cents a share, beat analysts' expectations by 2 cents.

The earnings beat Wall Street's forecast by a significant margin.

But while the earnings beat the consensus estimate, they fell short of some higher estimates, and Compaq shares dropped $1.25 to close at $73.375.

Its fourth-quarter earnings beat expectations and the company said it expected sales to improve in the next two years.

Without the one-time items, Microsoft's earnings would still have beaten analysts' projections of 31 cents a share.

Cisco gained 3 7/16, to 115, on hopes that fourth-quarter earnings, due to be reported today, would beat expectations.

The earnings beat the consensus estimate of analysts by a penny a share.

The bank also said its first-quarter earnings would beat expectations.

Intel, whose earnings significantly beat modest expectations, lost a point, to 82 9/16, on doubts about sustained growth.