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Adobe Profit Tops Estimate

Publishing and design software maker Adobe Systems Inc. (ADBE: Quote) said Thursday after the markets closed that its fourth quarter profit rose 28% from last year, helped by strong growth in Creative Cloud subscriptions as well as record Adobe Marketing Cloud and Document Services revenues.

The company's quarterly earnings per share, excluding items, also came in above analysts' expectations.

However, the company forecast first quarter and fiscal year 2013 earnings well below analysts' current consensus estimates.

"We beat our Creative Cloud subscription goals and established Adobe Marketing Cloud as the leader in the exploding category of Digital Marketing during fiscal 2012," said Shantanu Narayen, president and chief executive officer, Adobe. "In fiscal 2013 we intend to accelerate our pace of innovation, and drive integration between Creative Cloud and Adobe Marketing Cloud."

Adobe shares are currently gaining 6.39% in after hours trading after closing the day's regular trading session at $35.53, down 43 cents or 1.19%. The shares trade in a 52-week range of $26.39 to $36.28.

For the fourth quarter ended November 30, 2012, the San Jose, California-based reported net income of $222.3 million or $0.44 per share, compared to $173.7 million or $0.35 per share for the year-ago quarter.

Excluding items, adjusted net income for the fourth quarter was $307.9 million or $0.61 per share, compared to $332.6 million or $0.67 per share in the prior year quarter.

On average, 24 analysts polled by Thomson Reuters expected the company to earn $0.57 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Adobe Systems, famous for its Photoshop editing and Acrobat document-sharing software, said total revenue for the fourth quarter was $1.153 billion, compared to $1.152 billion in the same quarter last year. Twenty-two analysts had a consensus revenue estimate of $1.10 billion for the fourth quarter.

The company said it continued to accelerate adoption of Adobe Creative Cloud during the fourth quarter, as it migrates to a subscription model. The company said it added about 132,000 net new paid subscriptions during the quarter. Adobe noted that it added about 10,000 Creative Cloud subscriptions per week during the fourth quarter, compared to the addition of 8,000 subscriptions per week in the previous quarter.

Product revenue for the quarter fell 8.5% from a year ago, while subscription revenue rose 51.5% and services and support revenue increased 15.5% from last year.

During the fourth quarter, Adobe repurchased about 2 million shares for $67 million, taking the full fiscal year total to about 11.5 million shares purchased at a total cost of $372 million.

Looking forward to the first quarter, the company forecast revenue of $950 million to $1.0 billion, earnings of $0.08 to $0.14 per share and adjusted earnings of $0.26 to $0.32 per share.

Analysts currently expect the company to earn $0.56 per share on revenue of $1.07 billion for the first quarter.

For the fiscal year 2013, the company forecast revenue of about $4.1 billion, earnings of about $0.62 per share and adjusted earnings of about $1.40 per share. Analysts currently expect the company to earn $2.35 per share on revenue of $4.48 billion for the fiscal year 2013.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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