Moody's downgrades Hewlett-Packard

RELATED QUOTES

SymbolPriceChange
LGL5.03-0.01

Hewlett-Packard, the technology giant in dispute with Autonomy (LSE: AU.L - news) founder Mike Lynch (AMEX: LGL - news) , has had its credit rating cut by Moody’s amid concerns over its ability to keep up with rivals.

Moody’s also cited “execution challenges” as it slashed HP’s long-term credit rating from A3 to Baa1, just three levels above junk.

The credit downgrade is another pressure on HP as it faces a battle with Mr Lynch over accusations that Autonomy used irregular accounting methods to inflate its profits prior to its sale to the US computer-maker in 2011 for $11.1bn (£6.9bn).

HP stunned the markets last week when it said it was taking a $8.8m writedown against the deal. Mr Lynch rejects all allegations of impropriety.

Moody’s said it expects HP sales to drop 5pc next year.

Analysts suggested the downgrade showed a “lack of confidence” in HP ’s turnaround plan.