NEW YORK (CNN/Money) - Computer and printer manufacturer Hewlett-Packard reported pro forma earnings of 14 cents a share for its fiscal third quarter on Tuesday, meeting Wall Street's expectations.

The company missed analysts' targets for sales, however, reporting revenue of $16.5 billion. The consensus revenue estimate was $16.7 billion, according to First Call. This was the first earnings report for H-P since its merger with Compaq closed in May.

Pro forma earnings for the combined company did increase from 11 cents a year ago. H-P's earnings excluded inventory writedowns, acquisition-related charges and other restructuring costs. With these charges, H-P lost 67 cents a share. Revenues decreased 11.3 percent from last year's total of $18.6 billion in the third quarter.

H-P has been under severe pressure from Wall Street to prove that it can cut costs to offset the sluggishness in the personal computer industry. Investors seemed to be expecting the worst on Tuesday. The stock fell 4.3 percent and is down 18 percent since the merger was completed.

But the company did have good news, stating that it was a year ahead of schedule in cutting costs. H-P expects to save $2.5 billion in 2003 and $3 billion in 2004 as a result of the merger. It also reaffirmed earnings and revenue estimates for the fourth quarter of this year (which ends in October). Analysts expect pro-forma earnings of 22 cents per share and revenue of $17.4 billion.

Shares were up 3.8 percent in after-hours trading, at $14.75, according to Island ECN.

Still, H-P faces increased competition from IBM in the services area and from Dell in personal computers. Investors have also been concerned by the fact that Dell has decided to enter the printer market, H-P's bread-and-butter business.