HP Profits Up, But Shares Slump on Formal SEC Probe

Hewlett-Packard reported a four-fold increase in profits for its fourth quarter on a more modest rise in sales, as the top PC maker turned in results that exceeded Wall Street forecasts.In fact, the company’s full fiscal year results showed it moving past IBM as the world’s largest technology company in terms of revenue, with sales of US$91.7 billion.The upbeat report was dampened, however, after HP revealed that the Securities and Exchange Commission (SEC) had initiated a formal probe into the way the company handled the investigation into boardroom leaks. As a result, HP shares were down more than 2 percent in morning trading Friday, to $39.19.Net income for the quarter ending in October was $1.7 billion, compared with $416 million in the year ago period. Revenue was $24.6 billion, a 7 percent increase over the year-ago period.One reason for the strong earnings was that the year-ago quarter included about $1 billion in costs associated with layoffs and other cost-cutting measures undertaken when current CEO Mark Hurd began a comprehensive turnaround plan.Still, the performance validated most predictions that HP continues to execute its turnaround plan well. For the most part, it has kept its business on track despite the boardroom spying… Read full this story

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