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Adobe Systems revels in post-earnings bliss

As expected, Adobe Systems Inc. (Nasdaq: ADBE) shares took off Friday after the software developer topped Street estimates by a nickel a share in its second quarter. Its shares were up 5 1/8, or 7 percent, to 79.

In the quarter, Adobe pocketed $45 million, or 70 cents a share, on sales of $245.9 million.

First Call consensus expected it to earn 65 cents a share in the quarter.

The $45 million profit represents a 61 percent improvement versus the year-ago quarter when it made $28 million, or 41 cents a share, on sales of $227.3 million.

"We are pleased to report success and progress against our stated goals," said CEO John Warnock in a prepared release. "We remain committed to a fiscal year 1999 annual revenue growth rate of 15 percent, after divested business units, with an annual operating margin of 25 percent."

In the second quarter, application product sales grew to $209.7 million from the $184.9 million it recorded in the year-ago period. Licensing sales, however, fell to $36.2 million compared from $42.5 million.

Last quarter, Adobe shattered analysts' estimates, earning $38.3 million, or 60 cents a share, on sales of $226.9 million.

Earlier this quarter, company officials predicted strong results this quarter but also announced that it would trim 250 jobs, or roughly 9 percent of its workforce.

First Call consensus expects Adobe to earn $2.72 a share in the fiscal year.

The stock surged to a 52-week high of 81 1/16 in May after falling to a low of 23 5/8 in August.

Ten of the 13 analysts following the stock maintain either a "buy" or "strong buy" recommendation.

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