Hewlett Packard (HPQ), the Silicon Valley pioneer, reported a 14% jump in profit Monday night, thanks to cost-cutting measures that more than offset an 8% reduction in revenue. The results weren't a surprise: HP provided guidance earlier this month, when it announced plans to acquire 3Com, the networking giant.

"We believe that HP will outperform the market," HP CEO Mark Hurd said in an upbeat appearance on CNBC. "Spending will continue to be prudent in 2010, but it will be better than 2009."

Despite the profit growth, investors weren't that impressed. HP shares were trading down over half a percent late Monday in after-hours trading.

For years, the company relied on sales of printers and ink to boost revenue. But those days appear to be over.

HP's results show an increased emphasis on business services, putting HP into direct competition with IBM (IBM). The company's services operation is "a business that can compete and win," Hurd said on a conference call with investors and analysts on Monday.

HP saw its worldwide PC market share grow to 20.2%, up from 18.9% one year ago, according to data fro IDC cited by Bloomberg. Dell (DELL), meanwhile, saw its market share fall to 12.7%, down from 14.2% one year ago. HP said it earned $2.4 billion, or 99 cents a share, up from $2.1 billion, or 84 cents a share, a year earlier. The company's operating margin rose to 10.2%, up from 8.2% last year.

"When you look at the total picture, it's a better picture than a year ago," Hurd said.

Hurd said HP's acquisition of 3Com was propelled by the company's vision of "converged infrastructure," which seeks to integrate various components of business services into an integrated whole. "We believe that 3Com had the best technology on the planet," Hurd said.

HP's solid numbers offer further evidence that the malaise affecting competitor Dell has more to do with that company than any residual weakness in the IT market.