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Adobe shares drop on restated outlook

Ahead of its analyst meeting, the company repeats its expectations of hitting second-quarter targets as well as its murky outlook for the second half of the year.

Adobe Systems on Tuesday said it would meet second-quarter expectations, but added that its outlook for the second half of the year was murky.

The company issued nearly the same predictions in March. Today's announcement comes ahead of Adobe's analyst meeting, being held today in New York. But investors didn't want to hear about an uncertain outlook twice. Shares were down $ 3.32 at $ 41.60 in midday trading.

For the second quarter, which ends June 1, Adobe said it would meet its targets of 15 percent year-over-year revenue growth and relatively flat operating profit margin of 31 percent. In the year-ago quarter, the company posted revenue of $300.1 million, and an operating profit of $95.8 million, which excluded restructuring and other charges. Operating profit margins were 31.9 percent.

Adobe also stated that it has seen strong initial orders worldwide for the new version of its Adobe Acrobat software that was released in April.

"As expected, our U.S. business has not changed significantly, and we are still being affected by the economic downturn," CEO Bruce R. Chizen said in a statement. "In some European countries, we have started to see a slowdown; however, our Asia business continues to perform well. The uncertain global economic conditions are making the outlook for the second half of the year difficult to gauge."

Adobe had lowered revenue targets in March, after topping expectations for the first quarter. It said that it would be difficult to predict results for the rest of the year, given the "challenging and uncertain economic environment."