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Adobe Sales,Profit Forecasts Miss Some Estimates

Tuesday, 19 Jun 2012 04:50 PM

Adobe Systems Inc., the largest maker of graphic-design software, forecast fiscal third-quarter sales and profit that may miss some analysts’ estimates as it began selling its products by subscription.

Earnings excluding some items will be 56 cents to 61 cents a share, San Jose, California-based Adobe said in a statement. That compares with an average analyst estimate of 61 cents, according to data compiled by Bloomberg. Sales for the period ending in August will be $1.08 billion to $1.13 billion, missing the average $1.14 billion estimate.

By moving to subscriptions, Adobe is attempting to make sales growth more predictable, avoiding the revenue shortfalls and stock declines that occur in between updates of its Creative Suite software. Still, it will take Adobe more than four years to collect as much from a subscriber as it generates from a single sale of the desktop version of the top-end “Master Collection,” software package, which includes applications like Photoshop and Illustrator.

“There have been a lot of moving parts and disappointment in the last few quarters,” said Peter Goldmacher, an analyst at Cowen & Co. in San Francisco. “They need to rebuild credibility.”

Second-quarter net income fell to $223.9 million, or 45 cents a share, from $229.4 million, or 45 cents, a year earlier. Sales increased to $1.12 billion, compared with $1.02 billion in the year-earlier quarter.

Profit excluding some costs was 60 cents, topping the average 59-cent estimate, according to data compiled by Bloomberg.

Adobe retreated in extended trading, after earlier rising less than 1 percent to $32.89 at the close in New York. The stock has climbed 16 percent this year.

© Copyright 2017 Bloomberg News. All rights reserved.

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