Shares of Adobe Systems Inc. (NASDAQ: ADBE) have been soaring after the company reported yesterday after the market closed that its first-quarter profit jumped 52%, helped by strong demand for its design tools. The software maker also issued a stronger-than-expected sales and earnings outlook, despite fears of an economic slowdown.
For the quarter, Adobe Systems reported that its profit climbed to $219.4 million, or 38 cents a share, boosted by strong sales from its software tools like Photoshop, Illustrator, Dreamweaver and Acrobat. Excluding special items, the company's earnings came in at 48 cents a share, topping analysts' estimations for quarterly earnings of 45 cents a share.
Adobe Systems also announced a respectable 37% growth in revenues, to $890.4 million, up from $649.4 million a year earlier. Revenue during the period was helped by a 57% increase in its Creative Suite 3 solutions sales which rose up to $543.5 million in the quarter. Analysts, on average, were expecting the company show $876 million in revenue, according to Thomson Financial.
Looking ahead, the software maker said it expects a growth of 13 for its 2008 revenue as it plans to continue to make significant investments in research and development. Adobe also forecast second quarter earnings in a range of 45 and 47 cents a share with revenue between $855 million and $885 million. Analysts predicted second-quarter earnings of 44 cents a share on revenue of $875 million.
Adobe's surprising earnings and its optimistic outlook impressed traders, who pushed the stock higher over 13%.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
3-19-2008 @ 4:59PM
Jonny Hardwick said...
An increase in 52% profit is a striking increase. Traders should be very please about this outcome. It seems that now is a good time to invest in Adobe Systems as the year before they had in 37% increase in revenues. We all anticipated high increases in both profit and revenues for Adobe systems due to the strict investments in Research and Development. Adobe's positive outlook and smart investments for future technologies in the software industry sums up to be quite inspiring.
Jonny Hardwick
www.jonnyhardwick.com