Adobe’s fiscal third quarter earnings were solid, but the outlook for the fourth quarter was a bit light relative to expectations.
The company reported earnings of $230.1 million, or 44 cents a share, on revenue of $990.3 million, up 42 percent from a year ago. Non-GAAP earnings were 54 cents a share.
Wall Street was looking for earnings of 49 cents a share on revenue of $985 million.
That was the good news. The bad news?
Adobe (NASDAQ:ADBE) projected fiscal fourth quarter revenue of $950 million to $1 billion, or flat sequentially (statement). Earnings for the fourth quarter will be between 35 cents a share and 41 cents a share. Non-GAAP earnings will be between 48 cents a share and 54 cents a share. Wall Street was expecting earnings of 53 cents a share on revenue of $1.03 billion.
In other words, Adobe will have to stretch just to meet current Wall Street estimates. Investors weren’t pleased as Adobe shares were hammered in afterhours trading.
Still, in a call with analysts, Adobe CEO Shantanu Narayen was bullish on the outlook and said the company is “on track to deliver record revenue in fiscal year 2010.”
Two trouble spots for the Creative Services segment, with weaker than expected revenue in Japan and in the education verticals, but the company was quick to note that this wasn’t the results of market share loss but rather economic forces in Japan and a weaker back to school season across the board.
He also addressed the upcoming release of Acrobat 10, due out late this quarter, by noting that it brings consistent growth. The product doesn’t see the same immediate upticks that come with the release of other products. Instead, it sees adoption over a longer period of time.
Narayen maintains that “Adobe is at the center of the digital content revolution.” Using Adobe products, he said, customers can create, deliver, optimize and monetize across the many platforms, screens and devices.
“Nobody is better at monetizing content” in a multi-screen environment than Adobe, he said.