Adobe to post 2nd-quarter results; analyst says demand for CS5 off to ‘very strong start’

Monday, June 21, 2010

Adobe to post 2Q results; analyst says CS5 strong

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 CS5, the latest installment, in April. Investors will look for signs of how well the suite is selling, and so far most are optimistic. Sasa Zorovic of Janney Capital Markets said in a recent note that CS5 is off to a “very strong start” based on a survey of users.

WHY IT MATTERS: Creative Suite is used by small businesses such as design firms and advertising agencies. How much those companies spend on products like Adobe can say a lot about the state of the economy. Adobe’s technology is behind a broad range of products people can come across any given day: its Flash software is used in Web videos and games, Acrobat readers to view PDF files, and its Photoshop and Illustrator tools to edit and create a wide variety of content. The company is also working to further expand its offerings. To that end it bought Web analytics company Omniture Inc. last year.

WHAT’S EXPECTED: Analysts, on average, are expecting a profit of 43 cents per share, excluding items, on revenue of $905.5 million, according to a poll by Thomson Reuters.

In March, Adobe is forecast a profit of 23 cents to 30 cents per share. Excluding items, the company expects to earn 39 cents to 44 cents per share. It forecast revenue of $875 million to $925 million.

LAST YEAR’S QUARTER: Adobe earned $126.1 million, or 24 cents per share. Excluding special items, the San Jose, Calif.-based company earned 35 cents per share, in line with Wall Street expectations. Revenue dropped 21 percent to $704.7 million.

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