Why HP's PC Sales Gains May Not Last

NEW YORK (TheStreet) –– Though HP (HPQ) has broken its streak of 11 consecutive quarterly revenue declines, that may not last more than a few more quarters, due to a flat to declining PC market.

In the company's fiscal third quarter, Personal Systems revenue was up 12% from a year earlier to $8.6 billion, as both commercial and consumer segments rose 14% and 8%, respectively. However, CEO Meg Whitman cautioned that the growth is coming from a flat to declining PC market, indicating the company is taking share.

"The PC business is flat to declining slightly," Whitman said on the call. "And we think that that will continue. However, what we do believe is we can continue to gain share in a relatively flat market and that's because we've got a terrific product lineup, we've got a great go-to-market, our relationships with partners is better than it has ever been."

The only other segment outside of Personal Systems to grow this quarter was the Enterprise Group, which includes servers and storage and saw 2% year over year growth with a 14% operating margin.

According to research firm IDC, the overall PC market in the calendar second quarter was 74.4 million units, a year over year sales decline of 1.7%, which reflects "the smallest decline in global PC shipments since the second quarter of 2012."

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Credit Suisse analyst Kulbinder Garcha noted that some of the improvement came from Microsoft's (MSFT) ending Windows XP, which helped encourage people to buy new computers, but the improvement isn't likely to last, given the state of the PC market.

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