Adobe Systems to post 1st-quarter results as demand improves
By APMonday, March 22, 2010
Earnings Preview: Adobe Systems
NEW YORK — Software maker Adobe Systems Inc. reports its fiscal first-quarter results on Tuesday after the market closes.
WHAT TO WATCH FOR: Creative Suite, a software package targeting professional designers and developers, brings in the bulk of Adobe’s revenue. The company launched the most recent version, Creative Suite 4, in the fall of 2008, just as the financial crisis hit, which hurt sales.
Investors will be watching for how well CS4 is doing now that demand is improving. They will also be listening for any word on when Adobe plans to launch the next version of the product, which is expected to happen soon.
WHY IT MATTERS: Most of the customers of Adobe’s Creative Suite are small businesses, noted Sasa Zorovic, an analyst with Janney Capital Markets. So a rebound in demand for the software package is a good sign these businesses are recovering. Creative Suite is also used by advertising firms, so a sales pickup could signal that the industry is recovering. When ad agencies hire a new designer, said Zorovic, they buy a new Suite for them.
WHAT’S EXPECTED: Analysts, on average, are expecting a profit of 37 cents per share on revenue of $827.4 million, according to a poll by Thomson Reuters.
In December, Adobe forecast a profit of 34 cents to 39 cents per share, excluding items, on revenue of $800 million to $850 million.
LAST YEAR’S QUARTER: Adobe earned $156.4 million, or 30 cents per share, down 29 percent from the same period a year earlier. Adjusted earnings were 45 cents per share, beating average analysts’ estimates by a penny.
Revenue declined 12 percent to $786.4 million.
