Adobe’s revenue grows on strong software sales

Published 10:55 pm Monday, December 17, 2007

SAN FRANCISCO — Adobe Systems Inc. reported Monday that fourth-quarter profit surged 21 percent, beating Wall Street expectations thanks to record revenue after the company’s biggest-ever software launch.

Net income for the three months ending Nov. 30 was $222.2 million, or 38 cents a share, compared with $183.2 million, or 30 cents per share, in the year-ago period.

Fourth-quarter sales were a record $911.2 million, up 34 percent from a year ago and easily exceeding the company’s own estimates of $860 million to $890 million.

The San Jose-based software maker also announced Monday it would repurchase an additional 30 million shares for a total buyback of 50 million shares. The company, which announced the buyback in April, had repurchased 17.7 million shares through November out of about 587.9 million shares outstanding.

Excluding certain expenses, such as stock-based compensation and restructuring charges related to the December 2005 acquisition of Macromedia Inc., Adobe’s 4th-quarter profit was $289.6 million, or 49 cents per share, compared with $198.9 million or 33 cents per share in the year-ago period.

On that basis, which does not comply with generally accepted accounting principles, analysts had expected the maker of popular consumer and corporate software such as Photoshop and Acrobat to earn $281.15 million, or 37 cents per share, on sales of $887.33 million, according to a Thomson Financial survey.

“It was a strong quarter all around, from product perspective and geography,” Adobe CEO Shantanu Narayen, who replaced Bruce Chizen on Dec. 1, said in an interview with the Associated Press.

Chizen — beloved by employees and Wall Street during his 7-year stint at the top of one of the world’s five largest software companies — shocked Wall Street and Silicon Valley last month, when he said he was quitting the “all-consuming” role of CEO.

Chizen, 52, had been Adobe’s CEO for 14 years. He is to serve part time as a strategic adviser to the company through the end of 2008 and will be on Adobe’s board through the spring.

Narayen, who joined Adobe in 1998 as vice president and general manager of engineering, was most recently president and COO.

Shares of San Jose, Calif.-based Adobe closed Monday at $40.90, down $1.21 or nearly 3 percent. After the earnings report was released, they gained back 12 cents in after-hours trading.

For the 2007 fiscal year, Adobe earned $723.8 million, or $1.21 per share, up 43.1 percent from fiscal 2006. The company reported record revenue of $3.158 billion, up 22.6 percent from fiscal 2006.