Earnings drop, stock up for Adobe

Adobe Systems (ADBE) shares got a boost of 3-5/8 today to close at 38-5/8 after its stock rating was raised, despite a 12 percent drop in its third-quarter earnings announced Wednesday.

The graphics and printing software maker said its net profits fell to $29.8 million for the quarter ending August 30, compared with $33.9 million a year ago. Third-quarter revenues totaled $180.9 million for the quarter, down from $183.1 million last year.

Analyst Mary McCaffrey with Alex. Brown, though, raised her recommendation on Adobe stock to "strong buy" from "buy."

Application products revenue declined 6 percent to $130.5 million, compared with a year ago. Licensing revenue, meanwhile, was up 12 percent compared with a year earlier to $50.4 million.

"During the third quarter, we experienced some slowness in Macintosh software purchases, delays in new product shipments, and our usual summer seasonality," said John Warnock, chairman and chief executive.