Adobe sales are flat in tough market

'Will emerge from current recession stronger than ever'

By Kelly Fiveash • Get more from this author

Posted in Software, 17th December 2008 12:07 GMT

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Adobe Inc saw revenue rise less than one per cent to $915.3m from $911.2m, notching up its slowest growth in seven quarters for Q4.

Earlier this month the software maker blamed sluggish sales of its new Creative Suite 4 (CS4) family of products that began shipping in its fourth quarter in the US and Europe for putting a dent in the company’s expected revs.

The company, which makes Flash, Photoshop and Acrobat, posted an 11 per cent hike in Q4 net income to $245.9m, or 46 cents per share, from $222.2m, or 38 cents a share, a year earlier.

Adobe pulled in quarterly profit, excluding special items, of 60 cents per share. At the beginning of December the firm said it expected to see earnings of 59 to 60 cents a share, excluding items, and 45 cents to 46 cent a share including items.

“Although we expect 2009 will be a challenging year, we remain excited about the long term market trends driving our business, and are confident we will emerge from the current recession stronger than ever," said Adobe president and CEO Shantanu Narayen.

The firm reiterated its sales forecast for the first quarter it set earlier this month of between $800m and $850m, and expects to see an operating margin of between 25 per cent and 28 per cent excluding items.

San Jose, California-based Adobe forecast Q1 earnings to be between 43 cents and 47 cents per share, however the company did not provide full year earnings predictions.

On 3 December when the firm - which is in the process of culling 600 jobs - announced its Q4 prelims, Adobe also admitted that sales of its CS4 products had been disappointing for the quarter.

Adobe shares closed at $22.32, up 0.96 cents or 4.49 per cent on Nasdaq. ®

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