Tech Capital Expenditures Face Strong Headwinds

According to a Bloomberg report, tech majors (NYSEARCA:XLK) are likely to take a hit on revenues in 2012 due to cutbacks in government tech spending and by financial services firms.

“It will be a tough environment just because there’s so much pessimism out there,” said Richard Gordon, an analyst at market research firm Gartner. The industry will need to prepare for “general downward pressure everywhere.”

This is confirmed by Seattle CTO Bill Schrier who is preparing for a cut of 6% in his 2012 budget. “Spending is going to be down, and in some places it’s going to be down considerably,” Schrier said of technology spending by governments generally.

Sales growth for 2012 is not looking good with Microsoft (NASDAQ:MSFT) likely to post 7% growth (versus 12% 2011), Oracle (NASDAQ:ORCL) likely to grow 8% (versus 33% this year), while Intel (NASDAQ:INTC) could grow sales by 6%, far below this year’s likely 26%.

Some companies may still manage to do well in this gloomy outlook. These include VMWare (NYSE:VMW) which makes popular virtualization software, Citrix (NASDAQ:CTXS), and SAP (NYSE:SAP).

Here’s how these stocks are trading:

  • Microsoft Corporation (NASDAQ:MSFT): MSFT shares recently traded at $24.96, down $0.34, or 1.34%. Its market capitalization is $209.93 billion. They have traded in a 52-week range of $23.65 to $29.46. Volume today was 26,171,216 shares versus a 3-month average volume of 56,948,600 shares. The company’s trailing P/E is 9.07, while trailing earnings are $2.75 per share. The company pays a dividend of $0.80 per share for a dividend yield of 3.20%. About the company: Microsoft Corporation develops, manufactures, licenses, sells, and supports software products. The Company offers operating system software, server application software, business and consumer applications software, software development tools, and Internet and intranet software. Microsoft also develops video game consoles and digital music entertainment devices. Get the most recent company news and stock data here >>
  • Oracle Corp. (NASDAQ:ORCL): ORCL shares recently traded at $29.67, down $0.93, or 3.04%. Its market capitalization is $149.70 billion. They have traded in a 52-week range of $24.72 to $36.50. Volume today was 11,516,621 shares versus a 3-month average volume of 34,490,500 shares. The company’s trailing P/E is 16.88, while trailing earnings are $1.76 per share. The company pays a dividend of $0.24 per share for a dividend yield of 0.80%. About the company: Oracle Corporation supplies software for enterprise information management. The Company offers databases and relational servers, application development and decision support tools, and enterprise business applications. Oracle’s software runs on network computers, personal digital assistants, set-top devices, PCs, workstations, minicomputers, mainframes, and massively parallel computers. Get the most recent company news and stock data here >>
  • Intel Corporation (NASDAQ:INTC): INTC shares recently traded at $23.49, down $0.8, or 3.29%. Its market capitalization is $119.61 billion. They have traded in a 52-week range of $19.16 to $25.50. Volume today was 26,367,416 shares versus a 3-month average volume of 63,506,200 shares. The company’s trailing P/E is 10.17, while trailing earnings are $2.31 per share. The company pays a dividend of $0.84 per share for a dividend yield of 3.50%. About the company: Intel Corporation designs, manufactures, and sells computer components and related products. The Company’s major products include microprocessors, chipsets, embedded processors and microcontrollers, flash memory products, graphics products, network and communications products, systems management software, conferencing products, and digital imaging products. Get the most recent company news and stock data here >>
  • VMware, Inc. (NYSE:VMW): VMW shares recently traded at $93.07, down $0.78, or 0.83%. Its market capitalization is $39.29 billion. They have traded in a 52-week range of $74.04 to $111.43. Volume today was 1,153,124 shares versus a 3-month average volume of 2,217,070 shares. The company’s trailing P/E is 62.46, while trailing earnings are $1.49 per share. About the company: VMware, Inc. provides virtualization solutions from the desktop to the data center. The Company’s solution products addresses a range of IT problems, which includes cost and operational inefficiencies, business continuity, software lifecycle management and desktop management. Get the most recent company news and stock data here >>
  • Citrix Systems, Inc. (NASDAQ:CTXS): CTXS shares recently traded at $67.98, down $2.56, or 3.63%. Its market capitalization is $12.68 billion. They have traded in a 52-week range of $50.21 to $88.49. Volume today was 970,421 shares versus a 3-month average volume of 2,937,960 shares. The company’s trailing P/E is 37.79, while trailing earnings are $1.80 per share. About the company: Citrix Systems, Inc. designs, develops, and markets technology solutions that allow applications to be delivered, supported, and shared on-demand. The Company develops and markets comprehensive solutions across all dimensions of application, server and desktop virtualization as well as application and network optimization. Get the most recent company news and stock data here >>
  • SAP AG (NYSE:SAP): SAP shares recently traded at $57.90, down $0.66, or 1.13%. Its market capitalization is $68.88 billion. They have traded in a 52-week range of $46.70 to $68.39. Volume today was 625,362 shares versus a 3-month average volume of 1,941,960 shares. The company’s trailing P/E is 19.11, while trailing earnings are $3.03 per share. The company pays a dividend of $0.61 per share for a dividend yield of 1.00%. About the company: SAP AG is a multinational software company. The Company develops business software, including e-business and enterprise management software, consults on organizational usage of its applications software, and provides training services. SAP markets its products and services worldwide. Get the most recent company news and stock data here >>

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