Hewlett-Packard Co has had a clean bill of health following a review by Standard & Poor’s Corp, which says it affirmed the company’s A-1 plus commercial paper rating and assigned Hewlett-Packard Finance Co senior notes a double-A-plus rating. The total debt affected is $3,100m. The ratings agency says the company’s strong historical financial performance has benefitted from excellent control of expenses and headcount, which have enabled it to remain consistently profitable despite a difficult economic and competitive environment. Gross margins declined due to intense price competition and increasing sales of low-end, lower margin products but tight expense control has led to relatively stable operating margins in the mid-teens as a percentage of sales, and strong earnings growth. It added that while the extremely competitive environment in which the company participates precludes an upgrade, the strong competitive position and conservative financial position limit downside risk.
