Palo Alto, Calif.-based Hewlett-Packard Co. (HP) is a leading, global vendor of computing and imaging solutions and services, with pro forma 2001 revenues in excess of $80 billion. The ratings reflect the improved market position of HP after its May 2002 merger with Compaq Computer Corp. and its strong financial profile for the rating. However, these factors are partially offset by the heightened level of operational and strategic execution risk inherent in a merger of this size in the highly competitive and rapidly evolving technology market. HP's EBITDA margin was 7.5% in fiscal 2001, ended Oct. 31, down from historical levels in excess of 10%. Lower earnings have been largely driven by HP's computer hardware segments, which are currently break-even
