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Adobe issues warning about first-quarter revenue

Company says it will miss its previous forecast for revenue, but it expects to meet its profit forecast thanks to managing its expenses.

Corrected at 3:45 p.m. PST: An earlier version of this story incorrectly reported that Adobe announced it will miss both its revenue and profit forecasts for the first quarter. The company said it will miss its previous revenue forecast.

Faced with growing weakness in it business, Adobe Systems announced Wednesday it will miss its previous revenue forecast. But, the software maker said it expects to meet its profit forecast thanks to cost-cutting measures.

On Wednesday, Adobe shares were up nearly 9 percent in after-hours trading to $17.75. During the regular trading session, Adobe closed up 2 percent to end the day at $16.32 a share.

Adobe, which will report its first-quarter results on March 17, said it anticipates posting revenue of $783 million to $786 million in the quarter, compared with its previous forecast of $800 million to $850 million.

"Despite worsening market conditions, we were able to manage expenses to deliver earnings and margin results within the target ranges we provided at the outset of the quarter," Shantanu Nagayen, Adobe chief executive, said in a statement.

During the quarter, Adobe expects to release an operating profit of 30 cents a share, based on a GAAP accounting basis. That performance is on the low end of its previous forecast of 30 cents to 35 cents a share.

Although a number of companies are shying away from offering a forecast for the coming quarter, Adobe stepped up to the plate to deliver its forecast.

Adobe expects to see a further deterioration in its revenue to $675 million to $725 million in the second quarter, the company noted.