Adobe's Got Its House in Order

But isn't that what every company does automatically? Ask Microsoft(MSFT Quote) shareholders, who are now within a dime or so of another 52-week low, partly because of the lack of confidence in the company's appetite for further (and presumably needed cost cuts.)

This isn't to say that Adobe, which has steadily lost more than half its value, in the past five months has hit bottom. As we've seen with semiconductor stocks, a widening in year-over-year revenue declines isn't the key to higher share prices.

But as sluggish demand continues to deepen, so does Adobe's willingness to cut costs.

"Despite worsening market conditions, we were able to manage expenses to deliver earnings and margin results within the target ranges we provided at the outset of the quarter," said Shantanu Narayen, president and CEO.

And they'll do so again this quarter. Jefferies analyst Ross MacMillan, upgrading the stock to buy, noted on Thursday that the company's costs will come down another 12% as the company targets a second-quarter operating margin of 21% to 26%.

Adobe is selling the maxim that when demand continues to be uncertain, cutting costs is rarely a wrong move. On Thursday, investors were buying.