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Street Applauds Adobe Systems

Investors seemed to be following their advice. In recent trading, Adobe's stock was up $4.01, or 11.9%, to $37.66 on trading that was already more than three times the stock's normal daily average. Earlier in the session, Adobe's stock was up as much as $4.54 to $38.19.

On Thursday, Adobe reported that third-quarter profit plunged 35% from the year-ago period. But the falloff was largely due to acquisition and stock-options costs that didn't weigh on the company's results last year.

Setting those aside, Adobe's results topped expectations. Additionally, the Photoshop publisher gave guidance for the fourth quarter that essentially met analysts' growth targets.

In the quarter ended Sept. 1, Adobe earned $94.4 million, or 16 cents a share. In contrast, the company earned $144.9 million, or 29 cents a share, in the year-ago period.

Thanks in part to the company's acquisition of Macromedia -- whose results weren't included in the year-ago results -- Adobe's sales jumped 21.7% to $579.2 million.

Excluding options, amortization and certain other costs, Adobe would have earned 29 cents a share, compared with 31 cents a share last year.

On this basis, analysts polled by Thomson First Call were expecting the company to earn 26 cents a share on sales of $595.1 million. Adobe's guidance , which the company reaffirmed in August, called for earnings of 13 cents to 16 cents a share -- 25 cents to 27 cents, excluding options and acquisition costs -- on sales ranging from $580 million to $610 million.

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