Adobe reports profit, sales growth

Software publisher Adobe Systems reported sales and profit growth Thursday for its fiscal first quarter, thanks to growing interest in the company's Acrobat electronic publishing software.

Net income for the quarter, which ended Feb. 28, was $54.2 million, or 23 cents a share, compared with $49.8 million, or 21 cents a share, in the same period a year ago. Total sales were $296.9 million, compared with $267.9 million a year ago.

Excluding investment losses and other one-time charges, earnings were 25 cents a share. On that basis, analysts polled by research firm First Call had predicted earnings of 22 cents a share.

Revenue growth was particularly strong in the company's ePaper division, which included its Acrobat publishing software, said Shantanu Narayen, executive vice president of worldwide products for Adobe. Adobe released a new server version of Acrobat late last year as part of a broad enterprise push, and sales of the desktop version have continued to grow, Narayen said.

"We continue to believe the number of people who wish to communicate reliable information electronically is growing, and Acrobat is the best way to do that," Narayen said. "We think there's much greater penetration we can get."

Adobe also plans to expand the Acrobat market with the release of a new Acrobat product late this quarter, most likely a stripped-down "Acrobat Lite" aimed at ordinary officer workers who need to convert documents into Adobe's PDF format.

"We are looking to segment the product line with the launch of the next version of Acrobat in the second quarter," Narayen said.

Adobe also began courting a new segment of the consumer market early this year with the release of Photoshop Album, a light-duty digital imaging application intended to help digital camera rookies control their photo collections.

Narayen said response to the new product has been encouraging, and Adobe expects many buyers to eventually check out more advanced versions of Photoshop. "We think there's room to address a really universal need for the organizing and sharing of images," Narayen said. "We think that once we get customers exposed to these concepts, there's going to be a lot of upsell opportunities."

Adobe said in the earnings announcement that it expects revenue of $300 million to $315 million in the second quarter and pro forma earnings 24 to 27 cents per share.