Hewlett-Packard on Tuesday reported third-quarter earning that fell 19 percent from a year ago as sales of PCs and printers plummeted during the recession.

The Palo Alto, California, computing giant reported net income of $1.6 billion, or 67 cents a share, on revenue of $27.5 billion, down from $2 billion, or 80 cents, on $28 billion in revenue in the same period last year.

Excluding one-time items, HP posted a profit of $0.91 a share, slightly beating the average analyst estimate from Thomson Reuters of $0.90.

“Business is stabilizing,”  HP Chief Executive Mark Hurd said in a statement. “HP’s performance this quarter is a result of our strong business portfolio, efficient cost structure and scale,” he said.

HP’s business portfolio grew bigger in the last year when it acquired Electronic Data Systems for $13.9 billion, in an attempt to take on IBM.

In a note to clients, Pacific Crest analyst Brent Bracelin estimated that EDS accounts for 18 percent of HP’s total sales, or roughly $20 billion in revenue per year.

For its fourth quarter, HP expects to earn $0.97 a share, or $1.12 a share excluding one-time items. It also anticipates revenue to rise 8 percent from the third quarter.

Mr. Hurd offered a positive outlook. “We are confident that HP will be an early beneficiary of an economic turnaround and will continue to outperform when conditions improve,” he said in the statement.

HP shares were up $0.85, or 1.97 percent, to $43.96 in afternoon trading.