Adobe earnings beat goal

The Associated Press
Friday June 15, 2001

SAN JOSE — Adobe Systems Inc. surpassed Wall Street expectations with its second-quarter earnings Thursday, but said the economic slowdown has spread abroad and will flatten revenues in the upcoming quarter. 

For the three months ending June 1, Adobe earned $61.3 million, or 25 cents per share, compared with $65.8 million,or 26 cents a share, the same time a year ago. 

Excluding one-time items, the company said it earned $121.5 million, or 34 cents per share, compared to $97 million in the year-ago period. 

Analysts surveyed by Thomson Financial/First Call had expected Adobe to show a per-share profit of 29 cents in the second quarter. 

The San Jose-based company, the leader in desktop publishing software, reported that revenue for the three months was $344.1 million, up 15 percent from $300.1 million a year ago. 

The results were helped in part by the release of Adobe Acrobat 5.0, a new version of the portable document format, or PDF, reader that has become a de facto standard for document distribution on the Web.  

The product achieved record revenues, the company said, and led the so-called e-Paper Solutions segment to a 67 percent revenue growth rate for the quarter. 

But company officials said they expect overall revenues will flatten in the upcoming quarter, citing the continued slowdown of sales it experienced in Europe and North America during the second quarter.  

The company also factored in a “potential slowdown” in Asia. 




The company did not give specific numbers but said it expects year-over-year revenue growth to improve in the fourth quarter when major product upgrades will be rolled out. 

Chief executive Bruce Chizen reassured analysts during a conference call that the company does expect to “return to revenue growth rates in the mid 20s once the economic downturn has subsided.” 

“But will it happen as soon as the fourth quarter? Will the econonmy turn around that quickly? I don’t think so,” Chizen said later in an interview. 

With the Nasdaq Stock Market reeling from profit warnings from other high-tech companies, shares of Adobe closed down $1.17, or 2.9 percent, at $39.01 Thursday. Following the results after the market close, the stock price rose to $39.55. 


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