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December 14, 2006

Adobe posts strong quarter, Photoshop public beta

Adobe Systems Inc has posted better-than-expected financials and said it would launch its first public beta for Photoshop, one of its top-selling programs.

By CBR Staff Writer

The company also said it would begin shipping new versions of its Creative Suite at the end of the second quarter, as previously promised.

The San Jose, California-based company saw income during its fourth quarter rise 16% to $181.9m, or 30 cents a share, from a year ago. The increase was partly due to its December 2005 acquisition of Macromedia Inc, which boosted sales of its design and document sharing programs.

And strong Acrobat and Creative Suit sales helped push revenue higher to $682.2m from $510.4m last year, said Adobe chief operating officer Shantanu Narayen. That blew past analysts’ expectations of $671m.

Chief executive Bruce Chizen said, on a conference call, that the company would continue to invest in enterprise, digital video, mobile and web conferencing to drive continued growth.

Looking ahead, Adobe expects first quarter profit excluding items between 28 cents and 30 cents a share on revenue ranging from $640m and $670m, in line with analysts’ expectations.

Wall Street seemed satisfied and pushed Adobe shares 6% higher to $43.26 in after-hours trading on the Nasdaq yesterday.

During the quarter, Adobe’s so-called knowledge worker solutions business saw record revenue based on its latest Acrobat version 8 for professionals, Narayen said. Although it is early in the release … we’ve seen revenue and units in the Acrobat 8 cycle exceeded what we achieved with Acrobat 7 in a comparable timeframe, he said, on the call.

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Overall, the Americas was the region that drove the bulk of revenue, or 49%, followed by Europe with 32% and Asia with 19%.

Today’s beta version of Adobe’s forthcoming Photoshop program, called CS3, will be available for download for both Windows and Intel-powered Macintosh machines, on the Adobe Labs website.

The program includes the original Photoshop program and a new version of the Bridge photo management utility and Adobe Device Central, which creates pictures for small mobile phone and PDA screens.

When asked about the company’s progress for its search for a new chief operating officer, Chizen said he was optimistic and had seen some attractive candidates, but wanted to make sure it’s the right person.

However, Narayen said a new head of sales would begin on January 1.

The executives also announced it would no longer provide intra-quarter fiscal updates, based on feedback from shareholders, particularly longer-term shareholders who said such updates provided a level of volatility, Chizen said. So we are going to come in line with just about everyone else, he said, noting Texas Instruments was the only other tech company he was aware of that still provided intra-quarter updates.

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