Poor earnings hurt Adobe stock

Shares of Adobe Systems (ADBE) took a hit in trading today, after the company reported second-quarter results that fell short of Wall Street estimates.

Adobe shares fell as low as 35-1/2 in morning trading, before closing down 4-1/4 from yesterday--more than 10 percent--at 36. The company had reported its earnings yesterday after the market's close.

The software maker posted net earnings of $40.1 million, or 54 cents a share, for the quarter ending May 30. That compares with $22 million, or 29 cents a share, a year ago. However, excluding a $3.2 million write-off for research and development, Adobe would have posted net earnings of $42.1 million, or 57 cents a share.

Wall Street was expecting the company to report earnings of 59 cents a share, according to a collection of estimates on First Call.

Revenues, meanwhile, reached $228.3 million for the quarter, up from $204.3 million a year ago.

Adobe's licensing revenues climbed to $53.3 million for the quarter, up from $49.3 million a year earlier. The company noted that quarter-to-quarter growth in licensing revenues was driven by a rise in shipments of color printers, Japanese-made printers, and related products.

Revenues from application products increased to $175 million for the quarter, compared with $155 million a year ago. Those products saw a shift in platform demand: During the quarter, Adobe's Windows application products surpassed the Macintosh products for the first time, accounting for 51 percent of Adobe's sales.

Adobe recently completed an effort to offer the same features and functionality of Adobe's three major application products found on the Macintosh platform for the Windows platform, said John Warnock, chairman and chief executive, in a statement.