Moody's cuts HP's credit rating

NEW YORK Moody's Investors Service (MCO) is lowering its long-term credit rating for Hewlett-Packard (HPQ), saying the technology giant will have trouble increasing sales of many of its products.

Moody's says it lowered HP's senior unsecured credit rating by one notch, to "Baa1" from "A3." The rating agency cites concerns that the company's finances will remain weaker than previously expected "over the immediate term."

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Moody's senior vice president Richard Lane noted that about 75 percent of HP's revenue comes from personal computers, enterprise servers, printers and services. He said in a statement that those offerings "face slow to no growth prospects over the coming years."

Lane said it is uncertain whether HP can restore growth and profitability. He said the company's revenue will likely decline next year and its profit margin will narrow.

HP sales are falling. For its fiscal fourth quarter, the company announced revenue of $30 billion, down 7 percent from the year-ago period. Annual sales were down 5 percent, at $120.4 billion.

The company's stock price has also sunk, closing Wednesday at $12.73, the lowest level since 2002.