Hewlett-Packard (HPQ) is many things —a PC maker, printer manufacturer and software company — and on Friday it was a perfect example of stock market expectations trumping current reality. The stock soared 10% in early morning trading, boosted by an earnings report that, despite falling revenues and net income, beat expectations.

Its profit excluding restructuring and other charges was 82 cents a share—well above the 71 cents analysts had expected. But revenues were down 6% to $28.36 billion and net income, including restructuring and other charges fell, 16% to $1.23 billion, or 63 cents a share.

The Daily Ticker's Henry Blodget says it was a smart move by HP to issue a warning in the previous earnings quarter. Last quarter the company announced a five-year recovery plan as well as an $8.8 billion writedown of its $10 billion purchase of Autonomy, a British-based search engine company.

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