Adobe results beat Street view, shares rise

Thu Dec 15, 2011 7:03pm EST

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Dec 15 (Reuters) - Software maker Adobe Systems Inc, the maker of Photoshop and Acrobat software, released quarterly results that beat Wall Street projections, sending its shares up 3 percent.

The positive surprise came a month after the company announced plans to lay off 7 percent of its staff as it cut back on investment in some products and halted development of its Flash Player for mobile browsers, surrendering in a long-running war with Apple Inc over emerging Web standards.

The company said digital media and digital marketing, its core businesses, performed strongly in the quarter.

Adobe's concession to Apple and its late founder Steve Jobs, who famously derided Flash as an inefficient power-hog, came as the design software specialist warned that revenue growth will slow next year.

That is because the company is scaling back development of some products and shifting towards leasing other types of software via the cloud on a subscription basis, instead of selling licenses up front.

Adobe expects revenue in the current fiscal first quarter to dip due to seasonality but executives told analysts on a conference call that revenues in the second quarter would get a bounce thanks to the launch of new products.

"We would also expect Q3 and Q4 to follow normal historical patterns with a sequential decline in Q3 due to normal summer seasonality followed by a strong Q4," said Chief Financial Officer Mark Garrett.

The world's biggest maker of design software posted a profit, excluding items, of 67 cents per share for the fourth quarter, which ended December 2. That beat the average forecast of 60 cents, according to Thomson Reuters I/B/E/S.

Quarterly revenue rose 14 percent from a year earlier to $1.15 billion.

Adobe said it was targeting revenue of $1.025 billion to $1.075 billion for the current quarter.

Analysts on average expected revenue of $1.09 billion for the fiscal fourth quarter and $1.05 billion for the current quarter, which ends in February.

It said non-GAAP earnings per share in the current quarter would be 54 cents to 59 cents.

Shares of Adobe closed at $26.46 on Nasdaq and rose 3 percent to $27.26 in extended trading.

(Reporting by Noel Randewich, additional reporting by Jim Finkle)

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