2.) Fourth-quarter software sales will be weak Software sales face three major threats in 2012: a slowdown in Europe, negative impact from the U.S. government and a downturn in spending from financial services firms. According to JP Morgan, Europe, the U.S. government and the financial sector account for almost half of the world's IT spending. The firm notes that Oracle ( ORCL), Red Hat ( RHT) and Salesforce.com ( CRM) have reported disappointing quarters. Compuware ( CPWR)and Software ( SOW) have given negative preannouncements. The exception is SAP ( SAP), which had a surprisingly strong pre announcement. Indeed Microsoft's ( MSFT) corporate earnings, out after Thursday's market close, showed rather lackluster sales. The firm's second quarter profit was flat compared to one year earlier although it beat estimates by 2 cents. The CFO said that the firm is still battling a challenging PC environment with European consumers battered by the region's economic downturn. Microsoft's PC shipments fell 2% to 4%. However, shares were rising 2.2% in premarket trading after the company's earnings of 78 cents a share beat the forecast of 76 cents.
Microsoft released upgrades and products Wednesday including "Surface Studio" for artists. Bill Gates, Microsoft's Co-Founder, appears below with an early computer running the Paint program, the first of its kind.