Adobe profit falls; investors cheer
The software maker's shares rise, however, because guidance is a bit stronger than expected.
Update: 5 p.m. ET.
Adobe Systems (ADBE, news, msgs) said late Tuesday that it earned $126 million, or 24 cents per share, in its fiscal second quarter, a 41% drop from the $215 million, or 40 cents per share, it earned in the same period last year.
Adobe was hit by declining demand for its graphic-design software programs as advertisers cut back on spending because of the recession.
Revenue dropped 21% to $705 million, topping the consensus estimate of $695 million. Sales in the company's creative software division fell 22% to $411.7 million.
"Creative Suite 4 was unfortunate timing," said Pacific Crest Securities analyst Chad Bartley told Bloomberg News.
Creative Suite 4, a big graphic design, video editing and web development software package, came out last fall just as the recession worsened.
"The advertising market has seen substantial declines, with a lot of layoffs."
Adobe expects to earn 30 cents to 37 cents per share on revenue of between $665 million and $715 million. Wall Street is looking for 33 cents per share on $676.5 million in sales.
Adobe said sales are starting to bottom out in the U.S. The company also said it is continuing to look for merger and acquisitions opportunities.
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