14 DAY TRIAL // Adobe, one of the biggest software companies in the world, has announced this week lower income and sales for the second quarter. Earnings dropped 41 percent year over year, to $126.1 million, down from $214.9 million, while sales fell 21 percent, from $886.9 million in last year's second quarter to $704.7 million in 2009.
The earnings come in at 24 cents per share, having declined from 40 cents per share in the same period last year. The numbers are close to analysts' estimates, as expected sales were around $694.8 million according to research firm Thomson Reuters. Earnings for the second quarter added up to 35 cents per share, a 30 percent drop from last year, also in line with estimates.
Adobe CEO Shantanu Narayen was optimistic about the results and blamed the 20 percent drop in sales of its latest version in its leading Creative Suite line, CS4, on the poorer earnings. Adobe, while experimenting with cloud-based solutions, lately following a growing trend in the industry, still generates some two thirds of its revenue with the Creative Suite line.
“We are pleased with the solid profit margin and earnings results we were able to deliver in Q2,” Adobe's CEO said. “We continue to invest in our key business initiatives which will drive long-term revenue growth once the economy improves.”
Estimates for the entire year are equally bleak, with a $1.49 per share profit, down 28 percent, and sales of $2.9 billion, a drop of 19.7 percent. The company announced in December that it would lay off some 600 employees and has been taking other cost-cutting measures. Share price on the other hand has risen almost 80 percent, from a low point of $15.70 in February to a $27.56 after the announced earnings, but it is still 32 percent below last year's price.