Hewlett-Packard Co's better-than-expected quarterly results may raise the bar for competitor Dell Inc, which is more vulnerable to U.S. economic woes and reports earnings next week.

Dell earns about 85 percent of its revenue from business customers, many in the United States, whereas HP has a stronger focus on consumers and international markets.

The geographic spread and a leap in notebook computer sales helped spur HP results and forecasts past Wall Street numbers on Monday -- though its stock was barely changed on Tuesday in a market unnerved by credit concerns and weak retail spending.

HP is successful beyond almost anyone's expectations in personal computing, said J.P. Gownder, principal analyst at industry researcher Forrester Research Inc. Everything is clicking into place with HP.

Whereas Dell, he added, is at a very early stage of its turnaround. There's a lot of work ahead.

Brent Bracelin, an analyst at Pacific Crest Securities who has an outperform rating on Dell and a sector perform on HP, noted Dell's greater exposure to the U.S. market, but said: That is a risk factor that has been baked into the stock.

The United States accounted for 56 percent of Dell's fiscal 2007 revenue, compared with just a third for HP in its just-completed quarter.

Market growth continues to be led by a shift to mobility, consumer demand and emerging markets, which plays to our strengths, HP Chief Executive Mark Hurd told analysts on a conference call on Monday.

The credit crunch spreading from the U.S. subprime mortgage meltdown may also hit Dell harder than HP, which said it did not have a significant exposure to financial services.

If big (financial services) layoffs start to happen ... that could affect Dell adversely, said Kim Caughey, senior analyst and portfolio manager at Fort Pitt Capital Group in Pittsburgh, which manages $1.2 billion, including Dell shares.

Still, banks and other financial services firms are likely to replace old PCs despite any cost constraints. I don't think HP's gain means Dell's loss, she said. These are two vastly different creatures, the consumer and the business buyer.

Bracelin said several factors that helped Palo Alto, California-based HP, the world's largest PC maker, also bode well for its nearest rival Dell, based in Round Rock, Texas.

Those include strong PC demand, improving sales of server computers and data-storage equipment, and higher PC prices. Costs of computer components such as memory have also fallen.

HP shares rose 0.2 percent on the New York Stock Exchange, while Dell slumped 1.2 percent on Nasdaq as investors shifted to HP before Dell reports fiscal third-quarter earnings on November 29. Dell is down 14 percent in the past two weeks compared with HP's 8 percent decline amid broader market losses.

Shaw Wu, an American Technology Research analyst with a buy rating on HP, wrote in a research note that HP has sustainable competitive advantages including its very broad product line, strong international and consumer presence and room for further cost cutting.

(Editing by Braden Reddall)