SAN JOSE (dpa-AFX) - Publishing and design software maker Adobe Systems Inc. (ADBE) said Thursday after the markets closed that its fourth quarter profit dropped 71% from last year, as revenue declined but costs and expenses rose.
The company's quarterly earnings per share, excluding items, came in line with analysts' expectations, but its quarterly revenue beat analysts' forecast. At the same time, the company forecast first quarter and fiscal 2014 results below analysts' current consensus estimates.
'We are leading the software industry in transitioning our business to the Cloud, which is enabling us to target higher top-line growth and greater recurring revenue,' said Mark Garrett, executive vice president and chief financial officer, Adobe. 'We are raising our long-term revenue growth targets, with a compound annual revenue growth rate of 20 percent between fiscal year 2014 and fiscal year 2016.'
Adobe shares are currently gaining 6.96% in after hours trading after closing the day's regular trading session at $53.99, down 65 cents or 1.19%. The shares trade in a 52-week range of $35.19 to $57.99.
For the fourth quarter ended November 29, 2013, the San Jose, California-based company reported net income of $65.3 million or $0.13 per share, compared to $222.3 million or $0.44 per share for the year-ago quarter.
Excluding items, adjusted net income for the fourth quarter was $164.6 million or $0.32 per share, compared to $307.9 million or $0.61 per share in the prior year quarter.
On average, 21 analysts polled by Thomson Reuters expected the company to earn $0.32 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Adobe, famous for its Photoshop editing and Acrobat document-sharing software, said total revenue for the fourth quarter fell 10% to $1.04 billion from $1.15 billion in the same quarter last year. Nineteen analysts had a consensus revenue estimate of $1.03 billion for the fourth quarter.
For the fourth quarter, Adobe had forecast revenue of $1 billion to $1.05 billion and adjusted earnings of $0.28 to $0.34 per share.
Products revenue for the quarter fell 33% from a year ago, while subscription revenue surged 85% and services and support revenue increased 8% from last year.
Adobe ended the fourth quarter with 1,439,000 paid Creative Cloud subscriptions, an increase of 402,000 from a quarter ago.
Adobe Marketing Cloud quarterly revenue was $316.2 million, up 38% from a year ago.
Looking forward to the first quarter, the company forecasts revenue of $950 million to $1 billion, earnings of $0.02 to $0.08 per share and adjusted earnings of $0.22 to $0.28 per share.
Analysts currently expect the company to earn $0.34 per share on revenue of $1.02 billion for the first quarter.
For fiscal year 2014, Adobe is targeting total revenue to be essentially flat with fiscal year 2013 revenue of $4.06 billion. The company also targets earnings of about $0.27 per share and adjusted earnings of about $1.10 per share.
Analysts currently expect the company to earn $1.60 per share on revenue of $4.36 billion for the fiscal year 2014.
Adobe raised its long-term revenue growth rate targets and said it now expects to achieve a 20% compound annual growth rate between fiscal year 2014 and fiscal year 2016. As part of the growth targets, the company said it could achieve adjusted earnings of about $2.00 per share in fiscal year 2015 and at least $3.00 per share in fiscal year 2016.
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