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Adobe earnings, sales drop in second quarter

Software maker's earnings down 41 percent and sales fall 21 percent, but results are in line or slightly above analyst expectations.

Lance Whitney Contributing Writer
Lance Whitney is a freelance technology writer and trainer and a former IT professional. He's written for Time, CNET, PCMag, and several other publications. He's the author of two tech books--one on Windows and another on LinkedIn.
Lance Whitney

Adobe Systems announced lower second-quarter earnings and sales on Tuesday.

Income dropped 41 percent to $126.1 million, or 24 cents per share, from $214.9 million, or 40 cents per share, a year ago. Sales fell 21 percent to $704.7 million from $886.9 million in 2008's second quarter.

Results were actually in line with or slightly above estimates. Analysts surveyed by Thomson Reuters expected even lower sales of $694.8 million. Excluding the cost of special items, second-quarter earnings hit 35 cents a share, meeting analysts' expectations.

Adobe CEO Shantanu Narayen was upbeat about the quarterly performance.

"We are pleased with the solid profit margin and earnings results we were able to deliver in Q2," said Narayen. "We continue to invest in our key business initiatives which will drive long-term revenue growth once the economy improves."

For the third quarter, Adobe is forecasting sales of $665 million to $715 million with earnings of 20 cents to 27 cents per share, or 30 cents to 37 cents a share excluding special items.

Adobe typically counts on strong revenue from its Creative Suite line of products. But sales of the newest CS4 edition have been weak. The product was released late last year just as the recession was kicking into high gear.

Adobe has been moving to improve performance by cutting costs and introducing new products. In December the company said it would trim about 600 jobs. This week Adobe announced it's bringing its new business-class Acrobat.com PDF conversion site out of beta.