Desktop-publishing software maker Adobe Systems Inc. (ADBE) is set to release first quarter results after market opens on Tuesday, March 17 with the conference call scheduled at 2:00pm.
Most recently, the San Jose, California-based company updated its previously communicated first quarter forecast, slicing revenue expectations. The company cited weakness in its creative and knowledge worker businesses for the downward revision. The weakness was somewhat offset by the seasonal strength in Japan, as well as continued success with the company's LiveCycle enterprise business.
Adobe now expects first quarter earnings to be about $0.30 per share, and non-GAAP earnings between $0.44 and $0.45 per share. Revenues are projected to be in the range of $783 million - $786 million.
Earlier, the company had estimated earnings in range of $0.30 - $0.35 per share on a GAAP basis, and $0.43 - $0.47 per share on a non-GAAP basis, with revenue between $800 million and $850 million.
Analysts polled by Thomson Reuters expect the company to report earnings of $0.44 per share on revenues of $784.15 million for the quarter. Analysts' estimates typically exclude special items. In the year-ago period, the company reported net income of $219.4 million or $0.38 per share on revenues of $890.4 million.
Shantanu Narayen, president and chief executive officer of Adobe, said, "Despite worsening market conditions, we were able to manage expenses to deliver earnings and margin results within the target ranges we provided at the outset of the quarter."
Adobe, famous for its Photoshop editing and Acrobat document-sharing software, also projects second quarter revenues to range between $675 million and $725 million. In addition, the company targets an operating margin range of 21% - 26% on a GAAP basis, and 32% - 36% on a non-GAAP basis. Wall Street analysts have a consensus earnings estimate of $0.35 per share on revenues of $694.40 million for the second quarter.
Credit Suisse has raised fiscal 2009 revenue outlook for the company to $2.795 billion from $2.775 billion and non GAAP earnings estimate to $1.34 from $1.30 per share. Mean while, Friedman Billings Ramsey lowered 2009 earnings estimate to $1.43 from $1.70 per share, and revenue outlook to $2.84 billion from $3.20 billion.
For the fourth quarter, the publishing and design software maker posted 11% growth in earnings, helped by higher services revenue and income tax benefits. Net income for the quarter rose to $245.9 million or $0.46 per share from $222.2 million or $0.38 per share in the year-ago quarter. Quarterly revenue increased slightly to $915.30 million from $911.21 million in the previous year.
Adobe believes that the global economic woes and weaker-than-expected demand for its new Creative Suite 4 or CS4 software that began shipping in the fourth quarter in North America and Europe were the main cause for the shortfall in the fourth-quarter topline.
Adobe's software products include Photoshop Illustrator, Dreamweaver, Acrobat, Flash and Shockwave Player. In October, Adobe launched its latest version of CS4, a software package for graphical designers combining its Photoshop photo-editing software, 3-D computer drawing program Illustrator, Dreamweaver for designing websites and Soundbooth for audio-editing. The same month Microsoft unveiled the second version of Silverlight, its ammo in its latest battle with Adobe. Silverlight powers rich applications and interactive video across the Web and mobile devices.
Recently, online movie rental company Netflix Inc. (NFLX) said it would switch to Silverlight to stream movies over the Internet. Microsoft provided free development and support when CBS Corp.'s (CBS) college sports group decided to build its website using Silverlight. Microsoft's prize catch was video streaming using Silverlight during the Democratic National Convention, for which event the software giant was also the official sponsor.
General Electric Co.'s (GE) NBC Universal chose Silverlight over Flash to stream videos over the Web during the Beijing Olympics. NBC however, switched back to Flash for the start of the National Football League or NFL season in September as more than 90% of users had Flash installed on their computers.
Microsoft Corp. (MSFT) posted 11% decline in second quarter earnings, as the recession curbed revenue growth. Additionally, the company said it will cut up to 5,000 jobs over the next 18 months as part of its plan to control costs in light of the further deterioration of global economic conditions.
On December 3, Adobe Systems announced reduction of 600 jobs across all locations and business units as part of a restructuring program.
Adobe closed Tuesday's trading session at $18.45, down 23 cents or 1.23% on a volume of 11.9 million shares. In the past 52 weeks, the stock has been trading between $15.70 and $46.44, on an average 3-month volume of 9.70 million shares.
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