Adobe sees sales, net income jump
Adobe Systems Inc. reported Monday that its third-quarter profit more than doubled from last year, setting a revenue record and easily exceeding Wall Street’s expectations as the software company comes off its biggest-ever product launch.
Net income for the three months ended Aug. 31 was $205.2 million, or 34 cents a share, up 117% from $94.4 million, or 16 cents, a year earlier. Fiscal third-quarter sales were a record $851.7 million, up 41%.
Excluding costs for items including stock-based compensation and restructuring charges related to the December 2005 acquisition of Macromedia Inc., profit was $269.4 million, or 45 cents a share, up from $171.5 million, or 29 cents, a year earlier.
On that basis, analysts were expecting Adobe to earn $246.6 million, or 40 cents a share, on revenue of $789.3 million, according to a Thomson Financial survey.
“By any account, it was an extraordinary quarter,” said Shantanu Narayen, Adobe’s president and chief operating officer. “As long as the economy continues to perform, we believe we can be a double-digit growth company for many years to come.”
Shares of San Jose-based Adobe rose $1.65 in after-hours trading after release of the financial results. They had fallen 35 cents to $43.06 in the regular session.
Adobe executives said Monday that they expected fourth-quarter revenue of $860 million to $890 million and net income of 35 cents to 37 cents a share, or 46 cents to 48 cents excluding certain one-time expenses.
Even analysts who have followed Adobe for years said the company’s third-quarter results were a pleasant surprise.
“This kind of high upside doesn’t happen too often with big-revenue companies,” said Piper Jaffray & Co. analyst Gene Munster, who added that much of the quarter’s success could be traced to strong early sales of Creative Suite 3, which Adobe launched in April. The product includes updates to some of the company’s most popular programs, such as Photoshop and Illustrator.
“CS3 is a game-changing product,” Munster said.
