- The Washington Times - Tuesday, March 17, 2009

NEW YORK (AP) - Adobe Systems Inc., the company behind the popular Photoshop software, posted a decline in its fiscal first-quarter profit and sales Tuesday, squeezed by the economic downturn.

Adjusted earnings slightly exceeded Wall Street’s expectations, however.

The San Jose, Calif.-based company 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.

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 were 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.

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 of 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’ expectations 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,” President and Chief Executive Shantanu Narayen said in a statement.

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.

The company’s shares climbed 27 cents to $19.40 in after-hours trading, having earlier closed up 68 cents, or 3.7 percent, at $19.13 amid a broader market rally.

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