The ratings on Palo Alto, Cal.-based Hewlett-Packard Co. (HP) reflect a satisfactory business profile and minimal financial risk. These factors are partially offset by the significant level of operational execution risk inherent in the rapidly evolving technology market, as well as highly competitive industry conditions, which are likely to constrain additional profitability improvements. HP is a leading global vendor of computing and imaging solutions and services, with fiscal 2007 revenues of $104.3 billion. Operating profitability has risen over the past several years, supported by improving profitability in HP's enterprise and personal systems groups, which together account for about half of total revenues. Standard&Poor's Ratings Services believes HP's ongoing focus on cost reductions and efficiency improvements should enable the
