Adobe profit tops forecast

Design software maker Adobe
Systems Inc. (Nasdaq:ADBE - news) on Thursday posted a lower quarterly
profit as expenses rose, but results topped average Wall Street
forecasts and shares rose 8 percent.

Martin Pyykkonn, an analyst at Global Crown Capital, said
the results reassured investors that demand remained healthy
for Adobe's Creative Suite 2 offering and other products and
that customers were not putting off purchases until new
software releases next spring.

"The results showed some unexpected upside," Pyykkonn said.
"It looks like the situation is playing out where you don't
have a dramatic fall off in a product cycle and then a rise."

The maker of PhotoShop software said third-quarter net
income fell to $94.4 million, or 16 cents per share, from
$144.9 million, or 29 cents per share, a year ago as the
company.

Excluding items such as expenses related to its acquisition
of Macromedia, the company said it posted a per-share profit of
29 cents.

On that basis, analysts on average were expecting the
company to post a profit before items of 26 cents per share on
revenue of $594.2 million, according to Reuters Estimates.

Adobe bought Macromedia last December for $3.4 billion to
complement its strength in editing and distributing static
content such as text, photos and graphics with Macromedia's
ability to create Web graphics and advertising in its Flash
technology.

The company said expenses rose to $422.7 million from
$276.0 million as the software maker spent more in areas such
as sales and marketing and booked charges related to
Macromedia. Still, Chizen said the company was able to keep
costs down.

Revenue rose to $602.2 million from $487.3 million as sales
of the company's Acrobat file-sharing product were better than
expected, said Chief Executive Bruce Chizen.

Looking ahead to the current fourth quarter, Adobe forecast
revenue of $655 million to $685 million, with earnings per
share before items ranging from 32 cents to 34 cents.

The Wall Street view was for fourth-quarter revenue of
$670.5 million and earnings per share before items of 32 cents.

Adobe shares rose 8 percent to $36.26 in extended trading
from a Nasdaq close of $33.65.

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