Adobe's profit slides, but says better times are ahead

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Adobe has reported a 19 per cent drop in quarterly earnings but still beat analyst expectations, with the software company predicting stronger results for the year ahead.

Fiscal first quarterly profits fell to $127.2 million – or 24 cents per share – down from $156.4 million (30 cents a share) a year earlier. Revenue climbed 9.2 per cent to $858.7 million, with adjusted earnings pegged at 40 cents per share – beating Wall Street forecasts of 37 cents per share.

The company's shares rose over six per cent on the back of the news, closing yesterday at $36.51, with the company forecasting stronger second-quarter earnings of 39 cents to 44 cents a share on revenues of $875 million to $925 million.

Investors were no doubt also responding to Adobe's announcement that the latest version of its flagship Creative Suite software package, CS5, would be officially unveiled next month.

“We will be giving many more details of CS5's features, functionality and pricing on April 12, with shipping of the English version about four weeks later,” president and chief executive Shantanu Narayen revealed on an analyst conference call following the earnings report.

CS5 is expected to outperform its predecessor, which launched at the end of September 2008 – just as the global recession was beginning to take hold.

The company said its latest results were also boosted by a full contribution from Omniture, the web analytics portal acquired by Adobe for $1.8 billion in October. Omniture contributed about 10 per cent of Adobe's total revenues for the quarter.

Narayen added that Adobe had been able to bring a lot of Omniture's functionality under the CS5 umbrella, and promised further integration to come.

However, despite the bullish outlook, the company confirmed it had cut 305 jobs during the quarter as part of ongoing restructuring.

This follows the 680 jobs – nearly 10 per cent of the total workforce – that were cut in November.

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