Adobe Lowers Forecast as Profit Drops

Adobe Systems Inc., which makes software such as Acrobat for creating digital documents, Thursday reported an 18% drop in its fiscal second-quarter profit as acquisition costs negated higher sales.

The San Jose-based company also forecast profit and revenue for the current quarter and remainder of the year that were below Wall Street’s estimate.

Net income for the three months ended June 2 fell to $123.1 million, or 20 cents a share, from $149.8 million, or 29 cents, last year. Sales rose 28% to $635.5 million.

The company saw lower-than-expected sales of its Creative Suite product, which combines a host of Adobe titles, including Illustrator and Photoshop, executives said. Sales were especially weak in Europe and North America.

Excluding costs for acquisitions, stock options and other expenses, profit was 31 cents, higher than the 30 cents analysts had expected, according to a Thomson Financial poll.

Despite revenue falling below the $640 million to $670 million that Adobe executives had forecast in March, the company managed to meet its profit forecast of 30 cents to 32 cents excluding certain costs.

Adobe closed its purchase of Macromedia Inc., which makes Web software, in December, a deal that was valued at $3.4 billion when it was announced.

Adobe said profit before acquisition costs and other expenses in the current quarter would be 25 cents to 27 cents, below the average analyst estimate of 29 cents to 31 cents. The company said sales were likely to be $580 million to $610 million, below the average estimate of $629.1 million.

The company also lowered its forecast for the remainder of the year, saying revenue would be $2.54 billion to $2.6 billion, compared with a March forecast of $2.7 billion. Analysts on average had expected sales of $2.64 billion.

Adobe shares fell 3.8% to $27.85 in late-session trading after the income report was released. Earlier, the stock rose 39 cents to close at $28.96.