Software launch boosts Adobe

Adobe Systems Inc. said Monday that fiscal fourth-quarter profit surged 21%, beating Wall Street expectations, thanks to record revenue after the company’s biggest-ever software launch.

Net income for the three months ended Nov. 30 was $222.2 million, or 38 cents a share, compared with $183.2 million, or 30 cents, in the year-earlier period.

Fourth-quarter sales were a record $911.2 million, up 34% from a year earlier, exceeding the company’s estimates of $860 million to $890 million.

The San Jose-based software maker also said Monday that it would repurchase an additional 30 million shares for a total buyback of 50 million shares. The company, which announced the buyback in April, had repurchased 17.7 million shares through November, leaving about 587.9 million outstanding.

Excluding certain expenses, such as stock-based compensation and restructuring charges related to the December 2005 acquisition of Macromedia Inc., Adobe’s fourth-quarter profit was $289.6 million, or 49 cents a share, compared with $198.9 million, or 33 cents, in the year-earlier period.

On that basis, analysts were expecting the maker of popular consumer and corporate software such as Photoshop and Acrobat to earn $281.15 million, or 37 cents a share, on sales of $887.33 million, according to a Thomson Financial survey.

“It was a strong quarter all around, from product perspective and geography,” said Adobe Chief Executive Shantanu Narayen, who replaced Bruce Chizen on Dec. 1.

Adobe shares fell $1.21 to $40.90 before the earnings report was released. They fell an additional 69 cents in after-hours trading because some investors wanted the company to raise its annual forecast, analysts said.

For the 2007 fiscal year, Adobe earned $723.8 million, or $1.21 a share, up 43.1% from the previous year. The company reported record revenue of $3.158 billion, up 22.6% from fiscal 2006.

Adobe is known for software that’s popular and expensive, and it enjoys cult status among creative professionals such as photographers, video editors and Web designers.

This year brought the most significant product launch in Adobe’s 25-year history. In June, the company unveiled Visual Communicator 3 software, designed to create video broadcasts. Also this year, Adobe released its LiveCycle Enterprise Suite, which contains applications for automating processes.

And in July came Production Premium and Master Collection versions of Adobe’s Creative Suite 3, which debuted in April.