Adobe profit rise not enough for investors

 

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By Matthew Sparkes

Posted on 17 Jun 2008 at 09:28

Adobe may have seen a healthy 41% rise in quarterly profits, but it wasn't enough to reassure investors.

Net income in the last three months rose dramatically from $152 million to nearly $215 million, but a disappointing revenue prediction for the third quarter and an admission of slowing sales in the US was enough to prompt a 2.6% fall in the company's share price.

The company issued a revenue forecast of between $855 million and $885 million for the fiscal third quarter, although some investors "were expecting a higher forecast," claims Goldman Sachs analyst Sasa Zorovic.

Overseas sales compensated for a slowdown in US sales, and the company admitted that although it had so far remained relatively unscathed from an economic slowdown, there are no guarantees that this would continue.

"I'm not an economist. All I can do is reflect on what I have seen so far," said chief executive, Shantanu Narayen. "We are not immune to a recession."

Europe, the Middle East and Africa now account for over a third of revenue, while US sales have dropped from 49% two years ago to 44%.
"We expect to see the trend toward international revenue continue," says Narayen.

Earlier this month Adobe launched its new Acrobat.com service, an online collection of applications which competes with Google Docs and Zoho.com.

The move follows a period of increased investment in online applications which saw it purchase online word processor Buzzword in October last year.

Read a review of Adobe Acrobat 9 Pro Extended here