14 DAY TRIAL // Adobe posted its financial results for the third quarter and the numbers are gloomy but, for the most part, expected. The company comes from a disappointing second quarter and the new report is much of the same. Revenue was down from $887.3 million last year to $697.5 million and income also saw a 29 percent drop, from $191.6 million or 35 cents per share, to $136 million or just 26 cents per share.
“We are pleased with the solid revenue and earnings results we were able to deliver in Q3,” said Shantanu Narayen, president and CEO of Adobe. “Our focus remains on driving growth in our core businesses, as well as investing in promising new opportunities.” Narayen said in a conference call that despite the drop in sales due to the weak economy the company is still investing in future growth and has hired 100 new employees this past quarter.
Adobe's earnings were on par with analysts' estimates, which predicted $686.2 million in revenue and earnings per share, excluding special items, of 34 cents. The company managed 35 cents per share in earnings excluding items. Mostly responsible for the big drop in revenue are the poor sales of its Creative Suite software, which was released late last year. The weak economy drove sales down in all previous quarters and the sub par sales in Q2 were to blame for the poor performance then as well. Sales for the entire creative solutions department, which are largely made up of CS4 ones, dropped from $493.6 million Q3 last year to just $400.4 million in the same period this year.
For the current fourth quarter earnings and revenue are expected to follow a similar trend and Adobe says earnings per share excluding items will be between 33 and 39 cents while revenue is estimated at between $690 million and $740 million. According to Thomson Reuters, analysts expect earnings to be at 37 cents and revenue at $719.2 million.