Adobe Systems Inc., the company behind the popular Photoshop software, posted a decline in fiscal first-quarter profit and sales Tuesday, squeezed by the economic downturn.
However, adjusted earnings slightly exceeded Wall Street’s expectations, and the company’s forecast for the current quarter was in line with analysts’ estimates.
San Jose, Calif.-based Adobe had already warned this month of revenue falling below its previous targets. The recession has slowed sales of Creative Suite 4, the latest version of the software package that brings in the majority of Adobe’s revenue. The product launched last fall, coinciding with the worsening economic turmoil.
For the December-February period, Adobe earned $156.4 million, or 30 cents per share, down 29 percent from $219.4 million, or 38 cents per share, a year earlier.
Excluding one-time items such as stock-options expenses, restructuring charges and investment losses, adjusted earnings totaled 45 cents a share in the latest quarter, beating average analysts’ estimates by a penny.
Revenue declined 12 percent to $786.4 million, roughly in line with analysts’ estimates of $784.2 million, according to a survey by Thomson Reuters.
“While the economy had a clear impact on overall product demand, we were able to proactively align our expenses with our revenue,” said Mark Garrett, chief financial officer, on a conference call with analysts.
Adobe, which said in December it is cutting 600 jobs or 8 percent of its work force, trimmed its operating expenses by 6 percent during the first quarter, to $501.1 million.
Edward Jones analyst Andy Miedler said that while the economy has “clearly taken a toll” on Adobe’s revenue, the company is doing a good job managing its expenses and its overall business, which is helping profits.
“They are investing where they need to but also making the cuts where they need to,” said Miedler, who rates Adobe shares at “Buy.”
Shantanu Narayen, Adobe’s president and chief executive, said the Flash platform is among the areas the company continues to invest in, as use of the product grows beyond PCs to mobile devices, set-top boxes and gaming consoles.
The company’s Creative business, along with Acrobat, continues to represent growth opportunities for Adobe even in the current economy, he added.
Adobe forecast second-quarter earnings of 20 cents to 27 cents per share, or, excluding one-time items, a profit of 31 cents to 38 cents per share. Wall Street’s expectations for a profit of 35 cents per share, excluding items, is within that range.
The company expects revenue between $675 million and $725 million for the quarter, also bracketing analysts’ average forecast of $694.4 million.
“We believe the major market trends driving our business remain intact, and we will continue to focus on innovation and investing in new growth businesses,” Narayen said in a statement.
Netflix Series “The Leopard” Spots Classic Italian Novel, Remakes It As A Sumptuous Period Drama
"The Leopard," a new Netflix series, takes the classic Italian novel by Giuseppe Tomasi di Lampedusa and transforms it into a sumptuous period piece showing the struggles of the aristocracy in 19th-century Sicily, during tumultuous social upheavals as their way of life is crumbling around them.
Tom Shankland, who directs four of the eight episodes, had the courage to attempt his own version of what is one of the most popular films in Italian history. The 1963 movie "The Leopard," directed by Luchino Visconti, starring Burt Lancaster, Alain Delon and Claudia Cardinale, won the Palme d'Or in Cannes.
One Italian critic said that it would be the equivalent of a director in the United States taking "Gone with the Wind" and turning it into a series, but Shankland wasn't the least bit intimidated.
He said that he didn't think of anything other than his own passion for the project, which grew out of his love of the book. His father was a university professor of Italian literature in England, and as a child, he loved the book and traveling to Sicily with his family.
The book tells the story of Don Fabrizio Corbera, the Prince of Salina, a tall, handsome, wealthy aristocrat who owns palaces and land across Sicily.
His comfortable world is shaken with the invasion of Sicily in 1860 by Giuseppe Garibaldi, who was to overthrow the Bourbon king in Naples and bring about the Unification of Italy.
The prince's family leads an opulent life in their magnificent palaces with servants and peasants kowtowing to their every need. They spend their time at opulent banquets and lavish balls with their fellow aristocrats.
Shankland has made the series into a visual feast with tables heaped with food, elaborate gardens and sensuous costumes.... Read More