The ratings on Hewlett-Packard Co. (HP) 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. Palo Alto, Calif.-based HP is a leading, global vendor of computing and imaging solutions and services, with pro forma 2001 revenues in excess of $80 billion. HP's October 2002 fourth-quarter earnings demonstrated sequential improvement in both revenues and operating profitability. The company appears to be on track with its cost-reduction targets and continued to post strong results in
