Adobe Earnings Surpass Expectations

The desktop publishing power posted a profit of $40.1 million, or 17 cents per share, in the quarter ended Nov. 29. That represented a 17 percent improvement from net income of $34.3 million, or 14 cents per share, at the same time last year.

If not for accounting charges unrelated to its ongoing business, Adobe said it would have made 25 cents per share. That figure beat the consensus estimate of 23 cents among analysts polled by Thomson First Call.

The quarter marked the end of a prolonged slump for the maker of popular Acrobat and Photoshop software. Quarterly revenue totaled $294.7 million, an 11 percent increase from last year.

That represented the company's first year-over-year revenue gain since it registered a 15 percent increase in the second quarter of 2001.

The late-year sales surge 'demonstrates Adobe is truly a growth company,' said Bruce Chizen, the company's chief executive officer, during a conference call.

Adobe expects the momentum to continue into next year, with revenue ranging between $275 million and $290 million in the quarter ending in February.

Although that would be a drop-off from the just-completed quarter, the target is slightly higher than the $268 million in revenue the company booked at the start of 2002.

Adobe's announcement came after the market closed. The company's shares fell 7 cents to close at $25.87 on the Nasdaq Stock Market, then climbed 13 cents in extended trading.

Despite the gains in its latest quarter, Adobe's business remains well below the levels enjoyed during the high-tech boom years. At the same time two years ago, Adobe's revenue totaled $355 million, or 21 percent more than the company's just-completed quarter.

Adobe has been jettisoning jobs and cutting bonuses during its sales slump. Reflecting its optimism about the introduction of new features designed to increase the use of Acrobat and Photoshop, Adobe expects to hire more workers and restore some bonuses next year.

For its entire fiscal year, Adobe earned $191.4 million, or 79 cents per share, on revenue of $1.16 billion. The results dropped from last year, when Adobe earned $205.6 million, or 83 cents per share, on revenue of $1.23 billion.

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