PALO ALTO, Calif., June 6, 2001 At its semiannual business update today for the financial community, Hewlett-Packard Company (NYSE:HWP) said it is now seeing the slowdown in IT spending spreading beyond the United States and Europe. May sales in both consumer and enterprise markets in all regions were soft, and HP is now more cautious regarding its revenue guidance of flat to down 5% for the third fiscal quarter ending July 31, 2001. HP is also implementing additional expense reductions to increase the probability of achieving the current consensus analyst EPS estimate of $0.23. "While it is still early in the quarter, May was softer than expected and we are now addressing what is clearly becoming a global slowdown. We are taking additional steps to generate revenues and reduce costs while continuing to implement our long-term growth strategy," said Carly Fiorina, chairman, president and chief executive officer. "HP is a resilient company with many enduring strengths, including deep customer and partner relationships, global capabilities, compelling intellectual property, an unmatched installed base and a strong balance sheet. We are proceeding with a sense of urgency and an intense focus on execution. Despite an increasingly tough environment that could last for some time, we remain convinced that HP is on the right track. We intend to stay the course," said Fiorina.