Adobe shares advance on uptick in demand

AP News
Posted: Dec 16, 2009 12:22 PM

Shares of Adobe Systems Inc. climbed in midday trading Wednesday after the company said demand for its software picked up strongly in November.

The stock rose $1.44, or 4 percent, to $37.80. Earlier in the session the stock hit a 52-week high of $38.20.

Adobe's fiscal fourth-quarter results, released after the market close Tuesday, also beat out Wall Street expectations.

The company reported a loss of $32 million, or 6 cents per share, for the three months ended in November. But adjusting to exclude one-time costs, Adobe would have earned 39 cents per share. Analysts polled by Thomson Reuters expected 37 cents per share, on average.

Sales of $757.3 million, while down 17 percent, also beat out the average forecast, which called for $752.5 million.

"Adobe's business appears to have stabilized," FBR Capital Markets analyst David Hilal said in a note to investors Wednesday. He has a "Market Perform" rating on the company's stock.

Adobe said the better-than-expected sales figure was due in large part to an uptick in demand for Creative Suite 4, a package of software products for professional designers.

The latest version came out just as the financial crises hit and sales are likely to be about 20 percent below what Creative Suite 3 brought in.

The San Jose, Calif., company expects to release the next version some time in fiscal 2010. In a client note, Jefferies & Co. analyst Ross MacMillan said he expects CS5 to match sales for CS3. He kept a "Hold" rating on shares.