Adobe profit falls, demand improving

BOSTON, USA: Design software maker Adobe Systems Inc reported quarterly profit ahead of Wall Street projections, saying demand for its products picked up during November.

Executives for the maker of Acrobat, Flash and Photoshop software were hopeful the pickup in business will continue into 2010 - a worry among investors - but held off on issuing full-year forecasts.

"It's good news that business picked up in November. But sustainability is always a question mark," said Trip Chowdhry, an analyst with Global Equities Research.

The company is looking to the release of upgrades to its Creative Suite and Acrobat software lines next year to help boost sales. Together they account for nearly 90 per cent of revenue.

"We do have a much more optimistic view of 2010 than we have had in a while," Chief Financial Officer Mark Garrett said in an interview.

"All this is with a caveat that the economy holds up. That is why we did not give 2010 guidance for the year. One month does not necessarily a trend make. We want to be prudent. We want to see how this continues through the first quarter."

Adobe's sales stalled this year, primarily due to lackluster sales of CS4, its flagship suite of design software programs released in late 2008 as the global economy started to tank.

The line of software for creative professionals includes Photoshop photo-editing software, drawing program Illustrator, Dreamweaver for web design and the Soundbooth audio editor.

Some analysts say CS4 has not sold well because it lacks enough "must-have" features to justify the expense.

The company posted profit, excluding items, of 39 cents per share, in the fourth quarter ended November 27, beating the 37 cent average forecast of analysts, according to Thomson Reuters I/B/E/S.

Adobe forecast fiscal first-quarter earnings would be between 34 cents and 39 cents per share, excluding one-time items, the midpoint of which is slightly below the average analyst forecast of 37 cents.

The company whose rivals include Apple Inc and Microsoft Corp forecast first-quarter revenue of $800 million to $850 million, ahead of the Wall Street forecast of $798 million. That forecast includes $78 million to $83 million in revenue from Omniture, an Internet analytics firm that Adobe acquired in October for $1.8 billion.

The company posted a fourth-quarter net loss of $32 million, or 6 cents per share, compared with year-earlier net income of $246 million, or 46 cents.

Fourth-quarter revenue fell 17 per cent to $757 million, slightly ahead of the average forecast of $752 million.