Fitch lifts Hewlett-Packard

Fitch Ratings said it upgraded Hewlett-Packard Co.'s issuer default rating, senior unsecured debt rating and senior credit facility to A+ from A.

The outlook is stable.

The agency said the ratings and outlook are supported by the company's consistently solid credit protection measures; strong financial flexibility and liquidity provided by a significant cash position and robust free cash flow; solid revenue growth and material margin expansion across all segments, excluding HP Financial Services; significant recurring revenue; broad product portfolio; multi-channel distribution model; and geographically diversified revenue base.

Rating concerns include Hewlett-Packard's increasingly aggressive share repurchase program, significant debt-financed acquisitions and/or integration risk associated with acquisitions, the highly competitive nature of the information technology industry, the necessity for continual new product introductions and the potential long-term threat to the company's highly profitable printer supplies business from providers of remanufactured cartridges, Fitch said.

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