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December 20, 2010, 5:26 PM EST
By Aaron Ricadela and Adam Satariano
(Adds analyst’s comment in fourth paragraph.)
Dec. 20 (Bloomberg) -- Adobe Systems Inc., the top maker of graphic-design programs, forecast fiscal first-quarter profit that exceeded analysts’ estimates, bolstered by resurgent sales of the company’s desktop-publishing software.
Excluding some costs, profit will be 54 cents to 59 cents a share in the period ending in February, San Jose, California- based Adobe said today in a statement. Analysts had estimated 51 cents on average, according to data compiled by Bloomberg.
Sales of Creative Suite 5, released in April, are rebounding from a lull earlier in the year. Adobe had cited lackluster back-to-school demand in September when it issued a forecast that trailed analysts’ predictions. Creative Suite, which includes the Photoshop and Illustrator programs, is used by graphic designers, advertising agencies and schools.
“The rumors of the demise of CS5 were greatly exaggerated,” said Patrick Walravens, an analyst at JMP Securities LLC in San Francisco. He has a “market perform” rating on Adobe’s stock.
Adobe rose $1.29, or 4.5 percent, to $30.47 in extended trading. The shares, down 21 percent this year, had closed at $29.18 on the Nasdaq Stock Market.
Sales Forecast
The company targeted first-quarter revenue of $1 billion to $1.05 billion. Analysts had predicted $991.9 million. Adobe’s products for corporate customers are helping spur growth and lessen its reliance on Creative Suite, which accounts for more than half of revenue, Walravens said.
In the fourth quarter, which ended Dec. 3, Adobe earned 56 cents a share, topping the 52-cent estimate. Sales rose 33 percent to $1.01 billion. Analysts projected $988.3 million.
Net income was $268.9 million, or 53 cents a share, compared with a loss of $32 million, or 6 cents, a year earlier.
Earlier this month, Citigroup Inc.’s Walter Pritchard estimated that 30 percent to 40 percent of Creative Suite customers had bought version 5. Larger companies may have been waiting to upgrade, the San Francisco-based analyst said in a report at the time.
Adobe’s rosy forecast caps a tumultuous year for the company, which clashed with Apple Inc.’s Steve Jobs and later spurred speculation that it may be acquired by Microsoft Corp.
Jobs, Apple’s chief executive officer, banned Adobe’s Flash video software from his company’s iPhone and iPad, saying it wasn’t well suited to mobile devices. Adobe then won a partial victory on Sept. 9, when Apple eased restrictions on creating applications for its products.
Flex Software
Adobe is releasing a product called Flex that will “work around” the restrictions imposed by Apple, Walravens said. It lets developers make software for Apple’s mobile devices, as well as those using Google Inc.’s Android operating system.
Adobe faces a fresh challenge on Jan. 6, when Apple plans to open an online storefront for Mac software. That would give Apple a direct channel to customers -- unlike Adobe and Microsoft, which rely more on consultants, retailers and online merchants to sell their software.
Adobe’s stock surged in October after a report that Microsoft CEO Steve Ballmer had met with Adobe CEO Shantanu Narayen to discuss closer collaboration between the companies. The stock gave up much of the gains the next day, after the meeting was described as routine.
(Adobe began a conference call at 5 p.m. New York time today. To listen, dial +1-877-440-5804 with passcode 5203268, or go to {LIVE }.)
--Editors: Nick Turner, Stephen West
To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net; Adam Satariano in San Francisco at asatariano1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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(Adds analyst’s comment in fourth paragraph.)
Dec. 20 (Bloomberg) -- Adobe Systems Inc., the top maker of graphic-design programs, forecast fiscal first-quarter profit that exceeded analysts’ estimates, bolstered by resurgent sales of the company’s desktop-publishing software.
Excluding some costs, profit will be 54 cents to 59 cents a share in the period ending in February, San Jose, California- based Adobe said today in a statement. Analysts had estimated 51 cents on average, according to data compiled by Bloomberg.
Sales of Creative Suite 5, released in April, are rebounding from a lull earlier in the year. Adobe had cited lackluster back-to-school demand in September when it issued a forecast that trailed analysts’ predictions. Creative Suite, which includes the Photoshop and Illustrator programs, is used by graphic designers, advertising agencies and schools.
“The rumors of the demise of CS5 were greatly exaggerated,” said Patrick Walravens, an analyst at JMP Securities LLC in San Francisco. He has a “market perform” rating on Adobe’s stock.
Adobe rose $1.29, or 4.5 percent, to $30.47 in extended trading. The shares, down 21 percent this year, had closed at $29.18 on the Nasdaq Stock Market.
Sales Forecast
The company targeted first-quarter revenue of $1 billion to $1.05 billion. Analysts had predicted $991.9 million. Adobe’s products for corporate customers are helping spur growth and lessen its reliance on Creative Suite, which accounts for more than half of revenue, Walravens said.
In the fourth quarter, which ended Dec. 3, Adobe earned 56 cents a share, topping the 52-cent estimate. Sales rose 33 percent to $1.01 billion. Analysts projected $988.3 million.
Net income was $268.9 million, or 53 cents a share, compared with a loss of $32 million, or 6 cents, a year earlier.
Earlier this month, Citigroup Inc.’s Walter Pritchard estimated that 30 percent to 40 percent of Creative Suite customers had bought version 5. Larger companies may have been waiting to upgrade, the San Francisco-based analyst said in a report at the time.
Adobe’s rosy forecast caps a tumultuous year for the company, which clashed with Apple Inc.’s Steve Jobs and later spurred speculation that it may be acquired by Microsoft Corp.
Jobs, Apple’s chief executive officer, banned Adobe’s Flash video software from his company’s iPhone and iPad, saying it wasn’t well suited to mobile devices. Adobe then won a partial victory on Sept. 9, when Apple eased restrictions on creating applications for its products.
Flex Software
Adobe is releasing a product called Flex that will “work around” the restrictions imposed by Apple, Walravens said. It lets developers make software for Apple’s mobile devices, as well as those using Google Inc.’s Android operating system.
Adobe faces a fresh challenge on Jan. 6, when Apple plans to open an online storefront for Mac software. That would give Apple a direct channel to customers -- unlike Adobe and Microsoft, which rely more on consultants, retailers and online merchants to sell their software.
Adobe’s stock surged in October after a report that Microsoft CEO Steve Ballmer had met with Adobe CEO Shantanu Narayen to discuss closer collaboration between the companies. The stock gave up much of the gains the next day, after the meeting was described as routine.
(Adobe began a conference call at 5 p.m. New York time today. To listen, dial +1-877-440-5804 with passcode 5203268, or go to {LIVE }.)
--Editors: Nick Turner, Stephen West
To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net; Adam Satariano in San Francisco at asatariano1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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