Shares in Adobe Systems Inc rose as much as 13% Friday after the San Jose-based provider of desktop and web publishing software posted stronger-than-expected fourth-quarter results. Late Thursday, Adobe reported net income of $97.4m, or $0.76 per share, for the period ended December 3. Net income in the year- ago period was $50.3m, or $0.39. Revenue for the quarter rose 14.2% year-over-year to $281.8m.
Net of one-time items – which included $6.9m in restructuring and acquisition charges and an investment gain of $61.7m – Adobe said pro forma earnings per share came in at $0.46. Analysts surveyed by First Call were expecting a profit of $0.42 for the quarter. In the wake of the strong quarterly report, Adobe stock rose $3.75 Friday to close at $67.50, after trading as high as $71.875. Total volume for the session was 8.2 million shares, nearly five times the stock’s daily average.
Gross margins improved to 91.5% from 90.2% a year ago. Operating profit for the quarter was $81.9m, up from $72.5m in the year-ago period and $72m in the preceding quarter. The company said that the results were driven by continued strong demand for its products for web content creation and delivery, which has led to improved performance across all of its application product segments.
For the full year, net income soared 126% to $237.8m and earnings per share jumped to $1.84 from $0.77. Revenue for the 12 months rose 13.5% to $1.02bn, representing the first time in company history it has topped the $1bn mark. Looking ahead, Adobe says it is committed to goals of 20% annual revenue growth and 30% operating profit in fiscal 2000.
Separately, the company announced that president and co-founder Charles Geschke has announced his retirement. Geschke and CEO John Warnock founded Adobe more than 17 years ago, and have jointly run the company since its inception. His retirement will be effective at the end of March 2000, when Warnock will assume the title of president in addition to his current titles of co- chairman and CEO. Geschke will continue in his role as co- chairman of Adobe’s board.
