Adobe posts higher profit on Photoshop demand

SAN FRANCISCO (Reuters) - Adobe Systems on Thursday said its quarterly profit rose 39 percent on strong demand for its Photoshop and Illustrator software.

The company, which also makes the Acrobat document-sharing software, said net income for the third quarter ending 2 September rose to US$144.9 million, or 29 US cents per share, from US$104.5 million, or 21 US cents per share, a year ago.

Revenue climbed 21 percent to US$487.0 million from US$403.7 million as software sales rose.

Adobe, based in San Jose, California, saw solid sales in the just-completed quarter of its Creative Suite, and sales of its Acrobat document management software rose 28 percent from the year-ago quarter, said Adobe chief financial officer Murray Demo in a telephone interview.

Analysts had expected Adobe to earn a profit, on average, of 27 US cents per share on revenue of US$486.4 million, according to Reuters Estimates.

For the current fourth quarter, Adobe said it expects a profit of 27 US cents per share to 29 US cents per share and revenue of US$490 million to US$510 million, in line with current Wall Street expectations.

Adobe expects that its hobbyist products will do well in the seasonally strong fourth quarter due to holiday sales and it sees a sequential increase in its Acrobat desktop and its server business, Demo said.

In April, Adobe agreed to buy digital animation and design software company Macromedia for about US$3.4 billion in stock. The forecast for the current quarter does not include Macromedia, Demo said.

The companies compete in the design market, but Adobe's strength is in editing and distributing static content such as text, photos, or graphics, while Macromedia is a leader in animation tools for creating web graphics and advertising and is known for its Flash program.