H-P's CC: PCs, printing, cash flow, Russia/China discussed

|By:, SA News Editor

"The PC business is flat to declining slightly and we think that that will continue," says Meg Whitman on H-P's (NYSE:HPQ) FQ3 CC. However, Whitman argues her company, which just reported 12% Y/Y PC division sales growth, can "continue to gain share in a relatively flat market." (live blog)

While upbeat about H-P's PC, server, and networking performance, Whitman admits printing supplies and software (two high-margin businesses) "still face challenges." Supplies revenue (-5% Y/Y in FQ3), hurt by a secular shift towards online/mobile document and picture-viewing, is expected to remain under pressure.

CFO Cathie Lesjak states YTD free cash flow has totaled $7.4B; H-P expects to finish FY14 (ends in October) with ~$9B in FCF. Discussing macro conditions, Lesjak mentions Russian demand is expected to be hurt by geopolitical tensions, and Chinese demand by "increased competitive pressures."

Whitman asserts H-P has seen an improvement in server win rates against IBM, as it takes advantage of "the uncertainty customers feel" about the sale of Big Blue's x86 server unit to Lenovo. H-P's x86 server sales grew 9% Y/Y in FQ3.

HPQ -0.9% AH. FQ3 results, guidance/details.