Adobe elevated to $1bn-a-year company…

...even as co-founder plans to quit

Adobe made steady progress in its fourth quarter ending 3 December, increasing revenue to $282 million, up from $247 million a year earlier, and from $261 million in the previous quarter. This makes Adobe a billion dollar a year company for the first time, following 1998 revenue of $895 million. Net income for the quarter was up by 94 per cent year-on-year to $97 million, compared with $50.3 million in the year-earlier quarter and $57 million sequentially. Annual net income was $238 million which compares very favourably with last year's $105 million. Adobe has around half-a-billion dollars in cash and short-term investments, nearly double that of last year, so it could be on the acquisition trail before long -- and that shoud fuel those Corel takeover rumours nicely. Adobe is looking to 20 per cent annual growth and a 30 per cent increase in operating profit next year. Just over half of Adobe's revenues come from the Americas, with 29 per cent from Europe. The revenue increase has been coming from its Web content creation and delivery products. Only font-printing software decreased in revenue. A Linux version of the Acrobat Reader for Linux has been available for some time, and last week Adobe announced Acrobat Distiller Server, which does high-volume PostScript to PDF conversion, for the open source OS would ship next quarter. A beta trial of FrameMaker for Linux is now also available. Meanwhile, Charles Geschke, president and co-founder (in 1982) of Adobe, announced he will retire next March, although he will continue as co-chairman with CEO John Warnock, who will take on the presidency role. It does seems strange that American executives feel the need to have three roles, especially when the time has come for potential successors to be given some leadership opportunity. Some financial analysts have been expressing the view that Adobe could be caught short by XML so far as PDF was concerned, but perhaps they did not know that Geschke had pointed out that PDF was more widely distributed than browsers, and that FrameMaker does HTML, XML, PDF conversions. The financial analysts were ten per cent low on their consensus estimate, as reported by First Call, and they probably missed out on the doubling of Adobe's share price over the last year in their quest for Internet carrion. It was the fifth consecutive year that Adobe has beaten the financial analysts: it sounds as they need some mild chastisement. ®

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