Publishing and design software maker Adobe Systems Inc. (ADBE) said Tuesday after the markets closed that its second quarter profit fell 66% from last year, hurt by lower revenue as well as higher costs and expenses.
However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations and its quarterly revenue was in line with analysts' forecast.
At the same time, the company gave a downbeat guidance for the third quarter, but reaffirmed its fiscal year 2013 outlook.
"Our Q2 results reflect our leadership position in Digital Media and Digital Marketing," said Shantanu Narayen, president and chief executive officer, Adobe.
"Adoption of Creative Cloud continued to accelerate and we drove strong Adobe Marketing Cloud bookings growth in Q2," said Mark Garrett, executive vice president and chief financial officer, Adobe.
Adobe shares are currently gaining 4.45% in after hours trading after closing the day's regular trading session at $43.36, down 3 cents. The shares trade in a 52-week range of $29.52 to $47.17.
For the second quarter ended May 31, 2013, the San Jose, California-based company reported net income of $76.5 million or $0.15 per share, compared to $223.9 million or $0.45 per share for the year-ago quarter.
Excluding items, adjusted net income for the second quarter was $182.9 million or $0.36 per share, compared to $299.6 million or $0.60 per share in the prior year quarter.
On average, 26 analysts polled by Thomson Reuters expected the company to earn $0.34 per share for the second quarter. Analysts' estimates typically exclude special items.
Adobe, famous for its Photoshop editing and Acrobat document-sharing software, said total revenue for the second quarter fell 10% to $1.01 billion from $1.12 billion in the same quarter last year. Twenty-three analysts had a consensus revenue estimate of $1.01 billion for the second quarter.
For the second quarter, Adobe had forecast revenue of $975 million to $1.025 billion and adjusted earnings of $0.29 to $0.35 per share.
Products revenue for the quarter fell 26% from a year ago, while subscription revenue rose 60% and services and support revenue increased 18% from last year.
Adobe ended the second quarter with 700,000 paid Creative Cloud subscriptions, an increase of 221,000 from a quarter ago.
Adobe Marketing Cloud quarterly revenue was $229.6 million, with bookings growth of greater than 25%.
Last month, Adobe accelerated its shift to the cloud with a major update to Adobe Creative Cloud, the company's flagship offering for creatives. The company also said that it will focus creative software development efforts on its Creative Cloud offering moving forward and that it has no plans for future releases of Creative Suite or other CS products.
Looking forward to the third quarter, the company forecasts revenue of $975 million to $1.025 billion and adjusted earnings of $0.29 to $0.35 per share. Analysts currently expect the company to earn $0.35 per share on revenue of $1.01 billion for the third quarter.
For the fiscal year 2013, the company continues to expects revenue of about $4.1 billion and adjusted earnings of $1.45 per share. Analysts currently expect the company to earn $1.44 per share on revenue of $4.11 billion.
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