Adobe Systems announced lower second-quarter earnings and sales on Tuesday.
Income dropped 41 percent to $126.1 million, or 24 cents per share, from $214.9 million, or 40 cents per share, a year ago. Sales fell 21 percent to $704.7 million from $886.9 million in 2008's second quarter.
Results were actually in line with or slightly above estimates. Analysts surveyed by Thomson Reuters expected even lower sales of $694.8 million. Excluding the cost of special items, second-quarter earnings hit 35 cents a share, meeting analysts' expectations.
Adobe CEO Shantanu Narayen was upbeat about the quarterly performance.
"We are pleased with the solid profit margin and earnings results we were able to deliver in Q2," said Narayen. "We continue to invest in our key business initiatives which will drive long-term revenue growth once the economy improves."
For the third quarter, Adobe is forecasting sales of $665 million to $715 million with earnings of 20 cents to 27 cents per share, or 30 cents to 37 cents a share excluding special items.
Adobe typically counts on strong revenue from its Creative Suite line of products. But sales of the newest CS4 edition have been weak. The product was released late last year just as the recession was kicking into high gear.
Adobe has been moving to improve performance by cutting costs and introducing new products. In December the company said it would trim about 600 jobs. This week Adobe announced it's bringing its new business-class Acrobat.com PDF conversion site out of beta.
Adobe Systems announced late on Tuesday that it has begun shipping Creative Suite 4, the latest edition of its bundle of professional graphics and media applications.
Click on this image for more details about Adobe Systems' CS4.
(Credit: Adobe)The launch, which Adobe described as the largest in the company's history, includes updated versions of Photoshop, Illustrator, InDesign, Flash, Dreamweaver, Fireworks, Contribute, After Effects, Premiere Pro, Soundbooth, OnLocation, and Encore. Four different flavors of the suite are available, with prices ranging from $1,699 to $2,499.
Adobe continues to improve integration among the applications. After Effects, for example, can import Photoshop 3D layers and export content directly into Flash.
Options for working with high-definition video and mobile content expand too, with support for the latest formats, as well as for making Adobe AIR applications.
The CNET Reviews team has been toying with the beta code of CS4 for several weeks. Check out its first-take reviews and videos of the suite applications for more details. They will report back with rated reviews after working with the final code.
Google's search-ad business is a money machine, but every now and again the company manages to squeeze out a little revenue from other parts of its business. And on Wednesday, Google announced one such deal with another Silicon Valley power, Adobe Systems.
Google Site Search lets customers endow their Web sites with a customized search engine derived from Google's broader index, and Adobe is using it in two ways, said Nitin Mangtani, Google's lead product manager for enterprise search.
First is Adobe's new Community Help search site, which presents search results from thousands of Adobe-selected sites. There are plenty of sites with Lightroom development presets, Photoshop editing recipes, Flash programming tips, and other such information, so if successful, the Adobe site--in beta for now--could be a more effective way to dig up what's online.
Second, that community search ability is built into Adobe's new CS4 suite of applications for image editing, illustration, video production, and Web site design. Adobe already had moved to an HTML-based help system, so extending to the Community Help site was probably not too complicated.
Google has thousands of customers for Site Search. It's available as a free, ad-supported service, but customers also can pay for ad-free, Google-logo-optional versions costing $100 per year for indexing up to 5,000 Web pages or $500 per year for up to 50,000 pages.
Adobe fits into a higher-end category to accommodate the higher volume of search traffic and the millions of indexed pages, Mangtani said, but declined to share terms of the deal.
Update 3:50 p.m. PDT: Adobe wouldn't comment on the terms of the deal either, but it did supply some more information.
For one thing, here's how it picked which sites to index: "We asked experts in the community--prominent bloggers, training partners, book authors, etc.--which URLs do they keep handy in their bookmarks folder? We also have a few favorite sites of our own that our doc writers and tech leads visit regularly," said Mark Nichoson, product manager for Adobe Community Help, in a statement. "We don't include the Adobe Store or marketing info...and we don't include every Adobe-related site on the Web. Our goal is to ensure access to the most relevant, high-quality sites so that users can get the answers they need, no matter where those answers may be found."
More than 3,000 sites are indexed so far, and Adobe encourages the public to suggest others that should be added.
Adobe released details Monday about Creative Suite 4, its first update to more than a dozen design and editing tools since Adobe CS3 some 17 months ago.
The costs of the applications, set to reach consumers in October, haven't changed since CS3, but remain hefty. Should longtime users upgrade?
Click on this image for more details about the Adobe CS4 suites.
(Credit: Adobe)Of course that depends on the specific tools you need. However, we suspect that only the most well-heeled will jump at the chance, as CS4 shares the majority of tools with its predecessor. Perhaps more dramatic, life-changing alterations will come with the next Creative Suite. That said, time-saving tweaks to Illustrator and Flash in particular could lure professionals immersed in them to upgrade.
With CS4, Adobe aimed to unify the interfaces of more than a dozen applications, including Flash and other former properties of Macromedia. You'll see similar pull down menus for toggling among workspaces that you can customize, as well as Flash-based panels that nicely snap open and shut. Corporate design departments will find plenty of enhancements for their teams to share work more quickly.
Adobe continues to improve integration among the applications. After Effects, as only one example, can import Photoshop 3D layers and export content directly into Flash.
Options for working with high-definition video and mobile content expand too, with support for the latest formats as well as for making Adobe AIR applications. Among other highlights:
Photoshop CS4 will use your computer's graphics chip for the first time, while offering support for 64-bit Windows.
At long last, you can handle more than one project at a time in Illustrator, thanks to the new multiple Artboards feature.
Flash CS4 has a rebuilt animation model, so you can make objects move on the stage in two quick steps. And Flash introduces a new, XML-based file format.
Dreamweaver provides plenty of shortcuts to CSS coding, including within the Properties panel.
We've been toying with the beta code of CS4 for several weeks. Check out our first take reviews and videos of the six suites and their individual applications for more details. We'll report back with rated reviews after working with the final code.
Adobe Systems CEO Shantanu Narayen speaks at the company's CS4 launch event.
(Credit: Stephen Shankland/CNET News)Photoshop is a famously taxing piece of software, but beginning with the upcoming CS4 version, it'll be able to employ the muscle of your computer's graphics chip for the first time.
The new version of Adobe's flagship software product takes its first steps in using the graphics processing unit, or GPU, said John Nack, principal product manager for Adobe Photoshop. For example, the graphics chip helps Photoshop CS4 fluidly zoom in and out, rotate the canvas so artists can reorient an image for the best sketching angle, display and manipulate 3D objects, and handle color correction.
"It's not lost on us that when you look at the rate of GPU power advancement, there's an enormous wealth of cycles we can take advantage of now," Nack said. "The rate of price drop and performance gain has been off the charts."
Using graphics chips opens up new horizons, but it poses its challenges. For one thing, graphics chips are designed to blast pixels to the screen, not back to the main processor for further work, so not all tasks can be accelerated, he said. For another, it means Adobe has to work more carefully on hardware compatibility and means some people with older machines might have to upgrade at least the video card; he recommends a card with 128MB of memory.
"Typically, when folks were building a big Photoshop rig...we never had to really concern ourselves with things like which video driver they were using. We had a very light integration. Anything was fine," Nack said. "Now that we're doing actual processing on the GPU, we have to be a good deal more stringent."
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Adobe on Tuesday said it will launch an update to its flagship Creative Suite software bundle on September 23.
The company has offered few details of the planned CS4 release. The current iteration of the suite, CS3, is offered in several configurations that include various combinations of the company's core applications, such as Photoshop, Illustrator, Flash, Acrobat and InDesign.
Just ahead of the CS3 launch last March, Adobe made available a public beta test version of Photoshop CS3. For CS4, the company in May posted "preview versions" of its Dreamweaver Web design software, Fireworks image editing application, and Soundbooth audio editing tools.
In Photoshop CS3, which debuted last year, Adobe added rudimentary 3D editing and manipulation tools.
(Credit: CNET Networks)As for Photoshop CS4, Adobe has said publicly that it will make available a 64-bit version of the photo-editing software, but only for Windows and not for Mac OS X.
CS3 is currently offered in four configurations: Master Collection, which includes virtually the entire Adobe design software lineup; Design Premium, which includes Photoshop and other tools for designers working in print, Web and mobile applications; Web Premium, targeted at Web site designers; and Production Premium, geared toward people designing film, Web and mobile content.
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