* Expects FY13 adjusted earnings of about $1.40/share vs
* Forecasts revenue of about $4.1 bln vs est $4.47 bln
* Fourth-quarter adjusted EPS $0.61 vs est $0.57
* Revenue $1.15 bln vs est $1.1 bln
* Shares up 7 pct in extended trading
By Sruthi Ramakrishnan
Dec 13 Adobe Systems Inc, maker of
Photoshop and Acrobat software, forecast full-year results below
analysts' estimates but expects profit and earnings to grow 2013
The company forecast adjusted earnings of about $1.40 a
share on revenue of about $4.1 billion for 2013.
Analysts on average were expecting earnings of $2.35 per
share on revenue of $4.47 billion, according to Thomson Reuters
The company said it will be offering its web-based
subscription service Creative Cloud to enterprise customers in
2013, and as part of the move is transitioning the customers to
term-based Enterprise Term License Agreements (ETLAs).
Creative Cloud enables a customer to use the company's
Creative Suite content remotely on a subscription basis. The
suite includes popular design titles like Photoshop,
Illustrator, InDesign, Flash and Dreamweaver.
"We expect the impact of these (Creative Cloud)
subscriptions and continued adoption of ETLAs to effectively
transition approximately $690 million of reported perpetual
revenue to subscriptions next year," Chief Financial Officer
Mark Garrett said on a conference call.
Chief Executive Shantanu Narayen said cash flow will be less
than 2012 levels as the company goes through "this pivotal
year". "From 2013 onward, revenue, margin and EPS (earnings per
share) are all going to grow."
Revenue for the fourth quarter remained flat as more
customers moved to the company's subscription service.
A rapid adoption of subscription service tends to lower
revenue in the short term as fees are collected monthly, instead
of upfront one-time payment.
Net income for the quarter ended Nov. 30 rose to $222.3
million, or 44 cents per share, from $173.7 million, or 35 cents
per share, a year earlier. Excluding items, the company earned
61 cents per share.
Operating expenses fell 8.7 percent to $720.7 million.
Revenue was flat at $1.15 billion.
Analysts on average had expected earnings of 57 cents per
share on revenue of $1.1 billion.
Adobe said it added about 10,000 Creative Cloud
subscriptions per week during the quarter, compared with 8,000
per week in the third quarter.
"Because the way they are driving that (subscription model)
adoption through promotional pricing, that promotional pricing
is offsetting to some extent the high adoption rate and so
essentially revenues are flat," Edward Jones analyst Josh Olson
He said the company was executing its shift to subscription
strategy better than expected, but "there's still some work to
do, we'll see what 2013 brings."
Shares of the company have been rising since Dec. 11 after
Jefferies & Co raised its price target on the stock saying
investors are now more comfortable with the business model
The stock was up 7 percent in extended trading on Thursday.
They closed at $35.53 on the Nasdaq.