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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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
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