S&P: Hewlett-Packard on watch

Standard & Poor's said it placed the A corporate credit rating and senior unsecured rating and A-1 short-term rating on Hewlett-Packard Co. and its subsidiaries on CreditWatch with negative implications.

The CreditWatch listing follows news that Hewlett-Packard plans to move into higher value, higher margin growth categories, S&P said.

The company's plans include exploring strategic alternatives for its personal systems group that may include a separation from Hewlett-Packard, a spin-off, or other transaction, the agency said.

Although the separation of this unit could be incrementally positive to the company's overall business profile, the financial impact could potentially be significant, depending on the structure of any transaction and on the resulting Hewlett-Packard capital structure, S&P said.

The company also revised down its revenue and earnings outlook for the fiscal year and reported third-quarter revenue that was up 1% from the prior year and down 2% adjusted for currency, the agency said.

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