The ratings on Palo Alto, Calif.-based Hewlett-Packard Co. (HP) reflect a strong business profile and modest financial risk. A challenging macroeconomic environment for hardware in both consumer and enterprise markets and highly competitive market conditions partly offset those factors. HP is a leading global vendor of computing and imaging solutions and services, with fiscal 2008 revenues of $118.4 billion. The acquisition of Electronic Data Services (EDS) enhanced HP's position as one of the top-tier global IT services providers. Operating margins have increased consistently over the past three years, to 11.6% for fiscal year 2008. EDS integration savings and other cost-efficiency strategies have continued to improve operating margin in 2009 to 13% for the quarter ended July, despite macroeconomic headwinds. The
