The ratings on Palo Alto, Calif.-based Hewlett-Packard Co. (HP) reflect its broad market position and strong financial profile for the rating. These factors partly are offset by the significant level of operational execution risk inherent in the highly competitive and rapidly evolving technology market, as well as the company's earnings reliance on its printing and imaging segment. HP is a leading global vendor of computing and imaging solutions and services, with fiscal 2005 revenues of $86.7 billion. Operating profitability has trended up over the past several quarters, supported by improving profitability in HP's enterprise and personal systems groups, which together account for about half of total revenues and historically underperformed for the rating level. We believe HP's ongoing focus on
