Adobe Sales Up, But Outlook Uncertain

Adobe Systems reported Thursday that sales were up 17 percent for the first quarter, but that was still shy of the 25 percent growth rate the company had been hoping for.

Adobe executives said they remained confident about the growing acceptance of their products in the enterprise market and anticipated sales would grow 15 percent in the current quarter.

However, the company declined to provide guidance beyond the current quarter because of uncertain economic conditions.

Adobe reported sales of $329 million for the first quarter, up 17 percent from the prior year period. The company had been projecting that revenue would climb 25 percent this quarter.

Sales did pick up during the latter part of the first quarter, CFO Murray Demo said. The e-paper segment of the business, which includes Acrobat, grew 42 percent to $61.8 million from $43.4 million, he said.

"A bigger piece of business is around Acrobat," CEO Bruce Chizen said. "We're finding more business users."

Adobe will begin shipping Acrobat 5.0 this quarter.

Adobe beat Wall Street earnings forecasts of 28 cents per share by a nickel, excluding non-operating gains and losses. Including those gains and losses, the company reported net income of $69.8 million, or 28 cents a share, compared with year-ago results of $64.6 million, or 26 cents a share.

Despite the uncertain outlook, Adobe is committed to maintaining an aggressive market strategy, Chizen said. "We will be more aggressive in our market strategy, especially during a slowdown," he said.

The company also said CTO John Warnock, a co-founder of Adobe, will retire. Warnock will stay on as chairman of the board, the company said.

Adobe's stock was trading up $2.38, or 10 percent, to $27.38 a share in after-hours trading.