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BOSTON - Adobe Systems Inc, the maker of Photoshop and Acrobat software, reported that quarterly profit more than doubled on strong sales of recently upgraded products, and it gave a forecast that beat Wall Street expectations, sending shares up 4.5 per cent.
The world's largest maker of
design software maker posted a third-quarter profit of 45 cents per share, excluding some items - topping Wall Street analysts' average forecast of 41 cents. Revenue also topped an average estimate of US$790 million ($1.1 billion), according to Reuters Estimates.
"It was a very solid quarter with very strong Creative Suite adoption," said Brad Reback, an analyst with CIBC World Markets. Referring to the design software. "And a very solid outlook," he added.
Earlier this year, Adobe upgraded its entire line of design software, known as its Create Suite business. It upgraded the line from CS2 to CS3, adding features designed to enhance the product's performance on new Macintosh computers from Apple Inc .
Sales of those design products soared 65 per cent to US$546 million.
Sales of its Acrobat software, which businesses use to manage electronic documents, climbed 17 per cent to US$177 million. The company provides Acrobat reader downloads for free, but charges companies for software that can create and alter documents that those readers can display.
Some investors were not expecting Creative Suite to grow so quickly, said PiperJaffray analyst Gene Munster.
"While investors were worried about the August quarter, the August results are confirmation that CS3 is off to a strong start, and will likely have a stronger than expected tail," Munster said."
While Adobe is best known for such products as PhotoShop, used by professional designers, Acrobat, a document management system for office workers, and Flash, used by sites like YouTube to display online videos, it has been making fresh inroads into mobile phone, video and office worker markets.
"We have a very solid outlook. We are well positioned for continued double-digit revenue growth," Chief Executive Bruce Chizen said in an interview.
Adobe said it expected adjusted earnings per share in the fiscal fourth quarter of 46 cents to 48 cents, ahead of the Wall Street target of 44 cents, and revenue of US$860 million to US$890 million, ahead of analysts' average expectation of US$843.6 million.
Chizen said in the interview that he plans to do small acquisitions but sees no major purchases on the horizon.
"We certainly will keep our eyes open (for a major deal) if they make sense. (But) they are hard to do right," he said.
Adobe reported that net income for the fiscal third quarter ended Aug. 31 rose to US$205.2 million, or 34 cents per diluted share, compared with US$94.4 million, or 16 cents per diluted share in the quarter ended Sept. 1, 2006.
Third-quarter revenue rose to US$852 million from US$602 million a year earlier.
Shares of Adobe rose to US$45 in after-hours trade from a close of US$43.06 on Nasdaq.
- REUTERS
