Proving that last week's positive results out of Dell (NASDAQ:DELL) were no isolated fluke, Hewlett-Packard (NYSE:HPQ) came through with healthy top-line results last night. Well, at least revenues for the personal computer division jumped 20%.

The downside is that the division's robust $6.1 billion in revenues produced just $62 million in operating profits. There's no reason to cheer margins when the company's arms are trembling just to get its chin above the 1% bar. Yes, that was an improvement from prior periods, but does it really come close to justifying the acquisition of Compaq?

HP's flagship imaging and printing business posted operating profits of $968 million on $5.9 billion in revenues. That's more like it. Even the services subsidiary and enterprise systems operations produced higher operating profits despite bringing a lot less to the table in terms of revenues.

In sum, HP earned $0.35 a share on $19.5 billion in first-quarter revenues. The company is looking to hold the line sequentially, expecting to earn $0.34 a share on $19.2 billion to $19.6 billion in revenues, and is still on track to earn $1.43 a share in 2004. If it does so, the stock trades at just 17 times this year's earnings.

Compared to Dell at nearly 30 times earnings or Gateway (NYSE:GTW), which isn't putting up any profits at all, it's a relative bargain in an improving sector. In fact, Dell commands a larger market cap despite earning slightly less and selling significantly less. And if Dell has partnered with Lexmark (NYSE:LXK) to slow HP's dominance in printers, well, HP is growing its desktop and laptop business at a faster clip.

Investors clearly aren't sold -- yet. To close the deal, HP simply must improve its operating margins on its personal systems. That's the one missing piece that's keeping CEO Carly Fiorina's acquisition of Compaq from earning its promised synergy.

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Longtime Fool contributor Rick Munarriz wrote this story on his HP computer. He does not own shares in any company mentioned.