Scandal Scraps Weigh on H-P

H-P said it took market share in notebooks, desktops, Windows and Linux servers and blade servers in its recently completed quarter.

Notebook PC sales were up 24% year over, while desktop PC revenue was flat. Operating margins in the PC division was 4.3%, compared to 2.8% in the year-ago period.

According to industry research firm Gartner, H-P displaced Dell to become the world's largest PC maker in the calendar third quarter of the year.

Dell, which was also due to deliver its quarterly earnings Thursday, delayed the report at the last minute, citing an ongoing government probe into its books.

H-P had its own share of controversy during the quarter, with its chairwoman and its top lawyer exiting the company in the wake of a controversial boardroom press leak investigation that has resulted in felony charges.

With Hurd apparently not involved, investors have ignored the scandal. H-P executives weren't faced with a single question about the matter by analysts during the post-earnings conference call Thursday.

"The fourth quarter results showed that the company is firing on all cylinders. All of its major product lines in all geographies grew their revenues as well as profit margins," said Bob Djurdjevic, an analyst with Annex Research.

He noted that H-P's $91.7 billion in revenue for the fiscal 2006 year vault it ahead of IBM(IBM Quote), making it the world's largest information technology company.