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<TYPE>EX-99.1
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<FILENAME>a2045957zex-99_1.txt
<DESCRIPTION>EX 99.1
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                                                                   EXHIBIT 99.1

                    [HEWLETT-PACKARD COMPANY LETTERHEAD]

                         HP EXPECTS LOWER Q2 EARNINGS

Editorial Contact:
Suzette Stephens, HP
+1 650 236 5127
SUZETTE_STEPHENS@HP.COM


PALO ALTO, Calif., April 18, 2001 -- Hewlett-Packard Company (NYSE:HWP) today
announced that due primarily to rapid deterioration in consumer information
technology (IT) spending around the world, the company now expects to report
a revenue decline of between two and four percent both sequentially and
year-over-year for its second fiscal quarter ending April 30, 2001.

The company said the results also reflect an approximately four percent
adverse currency effect, as expected currency improvements did not
materialize during the quarter.

Based on the slowdown in consumer IT spending globally, the company expects
earnings per share to be in the range of 13 to 17 cents for the quarter. This
estimate includes approximately $150 million of one-time inventory and capacity
write-downs associated with some of the company's consumer products.

"When we issued our previous second fiscal quarter guidance, we had limited
visibility into the extent of the U.S. consumer and commercial downturn, its
potential impact on other regions and the continuation of adverse currency
effects. At this time, it is quite clear that the U.S. downturn in the consumer
market is now spreading to other regions, notably Europe," said Carly Fiorina,
chairman, president and chief executive officer.

"Recent European PC market data suggests the European slowdown is beginning to
mirror the pattern we saw in the U.S. - growing softness in the retail sector
and increasingly competitive pricing moves followed by a more subtle but just as
meaningful slowdown in the enterprise space.

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April 18, 2001
Page 2

"Despite this difficult climate, on a global basis, we're seeing a slight
improvement in our enterprise business. In contrast with the increasing weakness
in the consumer space, revenues from our enterprise business are expected to be
flat or up slightly on a sequential basis.

"In this challenging environment, we're staying focused on our strategy and
working hard to achieve the right balance between adjusting costs and
expenses downward to address current business conditions, while continuing to
make the necessary investments in areas such as R&D to assure that we come
out of this slowdown strong and well positioned," said Fiorina.

Fiorina said that in recognition of the contributions HP employees are making
during these tough times, the company will not defer salary increases beyond
the 90-day delay instituted during the first quarter. Instead, the company
will take additional actions to manage expenses, including maintaining tight
control of discretionary spending, requiring employees to take incremental
days off, and reducing management cost structures by improving span of
control through the elimination of up to 3,000 management positions.

"We remain confident that our strategy is the right one," said Fiorina. "We
believe we will emerge from this downturn a more aggressive and focused
competitor."

Fiorina said HP has limited visibility in this economic environment, but current
planning assumptions for the third quarter call for flat revenues sequentially
and year-over-year, with gross margins trending up. These assumptions are
subject to change based on evolving market conditions.

A 30-minute conference call with Fiorina will begin today at 8:30 a.m.
EDT/5:30 a.m. PDT. To listen to the conference call replay, available from
11:00 a.m. EDT/8:00 a.m. PDT today until 8:00 p.m. EDT/5:00 p.m. PDT April
24, 2001, call +1 858 812 6440, using reservation number 18643574.

ABOUT HP

Hewlett-Packard Company -- a leading global provider of computing and imaging
solutions and services -- is focused on making technology and its benefits
accessible to individuals and businesses through simple


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April 18, 2001
Page 3

appliances, useful e-services and solutions for an Internet infrastructure
that's always on.

HP had total revenues from continuing operations of $48.8 billion in its 2000
fiscal year. Information about HP and its products can be found on the World
Wide Web at http://www.hp.com.

                                      # # #

This news release contains forward-looking statements that involve risks and
uncertainties, as well as assumptions that, if they never materialize or
prove incorrect, could cause the results of HP and its consolidated
subsidiaries to differ materially from those expressed or implied by such
forward-looking statements. All statements other than statements of
historical fact are statements that may be deemed forward-looking statements,
including any projections of earnings, revenues, or other financial items;
any statements of the plans, strategies, and objectives of management for
future operations; any statements concerning proposed products, services, or
developments; any statements regarding future economic conditions or
performance; statements of belief and any statement of assumptions underlying
any of the foregoing. The risks, uncertainties and assumptions referred to
above include the ability of HP to retain and motivate key employees; the
timely development, production and acceptance of products and services and
their feature sets; the challenge of managing asset levels, including
inventory; the flow of products into third-party distribution channels; the
difficulty of keeping expense growth at modest levels while increasing
revenues; and other risks that are described from time to time in HP's
Securities and Exchange Commission reports, including but not limited to the
annual report on Form 10-K for the year ended Oct. 31, 2000, and subsequently
filed reports. HP assumes no obligation to update these forward-looking
statements.
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