SAN JOSE, Calif. (AP) – Hewlett-Packard Co. shares slipped Friday after the company said fiscal fourth-quarter earnings quadrupled but the Securities and Exchange Commission had ordered a formal probe of its boardroom spying scandal.

Shares of Palo Alto-based HP fell 36 cents to close at $39.77 on the New York Stock Exchange. Analyst Shaw Wu with American Technology Research chalked up a dip in the stock in after-hours trading Thursday to “minor profit taking” following a “very solid” quarter.

“The stock has been a superstar and the stock is not a bargain at current levels,” Wu said. HP shares had closed up 34 cents to $40.13 on the New York Stock Exchange before the company reported.

HP reported after financial markets closed Thursday that for the three months ended Oct. 31 it earned $1.7 billion or 60 cents per share, compared with $416 million, or 14 cents per share, in the same quarter last year. The company registered higher sales of laptop computers, printers and servers.

Excluding one-time charges, such as $208 million in restructuring-related adjustments and amortization, the company earned $1.9 billion, or 68 cents per share, up 27 percent from the same quarter last year.

Analysts were expecting HP to earn 64 cents per share on sales of $24.1 billion for the quarter, according to a survey by Thomson Financial.

“We closed a strong year with solid revenue growth, margin expansion across our key businesses and excellent cash flow from operations,” said Mark Hurd, HP’s chief executive officer, in a statement. “We are well on our way to building a more competitive HP that creates further value for our shareholders.”

Sales for the fiscal fourth quarter increased 7 percent to $24.6 billion, compared with $22.9 billion last year.

HP also cracked $90 billion in annual revenue for the first time, accelerating the competition with IBM Corp. for the distinction of being the world’s largest technology vendor in terms of sales.

For the year, the company earned $6.2 billion, or $2.18 per share, compared with $2.4 billion, or 82 cents per share. Sales for the year were $91.7 billion, compared with last year’s total of $86.7 billion.

During the quarter, HP snatched the No. 1 ranking in worldwide personal computer shipments from Round Rock, Texas-based rival Dell Inc., market research firms Gartner Inc. and IDC reported in October. The last time HP had held the top spot was the final quarter in 2003.

Dell was also scheduled to report quarterly financial results on Thursday, but a day earlier postponed the release of its third-quarter earnings report until sometime later this month. Dell also said that federal regulators had begun a formal investigation of the company.

But the SEC development was a dark cloud over HP’s sunny financial news. HP said in a regulatory filing that the SEC had upgraded its informal inquiry into the spying scandal into a formal investigation.

The Federal Communications Commission has also requested documents related to HP’s effort to unmask the source of boardroom leaks to the media, and HP faces five shareholder lawsuits related to the investigation, according to the filing.

HP had previously disclosed that it was the subject of inquiries by the SEC, the U.S. Attorney’s Office for the Northern District of California, a congressional panel and California’s attorney general.

“We do not believe this represents an escalation or broadening of the investigation and are continuing to cooperate fully,” HP spokesman Ryan Donovan said late Thursday.

The news came a day before lawyers for former HP insiders, including ousted Chairwoman Patricia Dunn, and outside detectives criminally charged in the probe were scheduled to return to state court in California to schedule future court dates.

Investigators allegedly used a shady tactic known as “pretexting,” or impersonating someone else, to illegally obtain the private phone logs of board members, journalists and others.

Investors have largely shrugged off HP’s embarrassing spying scandal, which erupted in early September and spawned criminal charges against former Dunn, former ethics chief Kevin Hunsaker and three outside investigators – Ronald DeLia, Matthew DePante and Bryan Wagner.

The defendants have all pleaded not guilty to felony identity theft and fraud charges filed by California Attorney General Bill Lockyer. Their lawyers are scheduled to return to Santa Clara County Superior Court in San Jose on Friday to discuss case management and pretrial scheduling matters.

HP’s stock price has gained nearly 12 percent since closing at $36.46 on Sept. 5, the day before the company disclosed the probe in a regulatory filing.

Analysts have praised Hurd’s cost-cutting measures and nuts-and-bolts operational efficiency in righting HP’s course since taking over 21 months ago, when the stock was hovering around $20 under former CEO Carly Fiorina.

HP has completed the bulk of a restructuring program Hurd announced in July 2005, which so far has resulted in the elimination of 14,200 positions. HP expects to cut about 1,000 remaining positions in the current quarter.

The company also said Thursday that for the first quarter of 2007 it expects to earn between 55 cents and 57 cents per share, or between 60 cents and 62 cents per share excluding one-time charges, on revenue of between $24.1 billion to $24.3 billion.

For 2007, earnings are expected to be between $2.28 and $2.33, or between $2.48 and $2.53 excluding one-time charges, according to the company. Annual revenue is expected to be about $97 billion.


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