Adobe Shares Climb After 2Q Results

NEW YORK (AP) — Shares of Adobe Systems Inc. made modest gains Wednesday after the company's second-quarter results met expectations and analysts said pent up demand for its software could help down the road.

"We view these results as an incremental positive sign that Adobe is successfully managing its business through the economic downturn," Thomas Weisel analyst Blair Abernethy said in a note.

Adobe, which makes the popular Photoshop and Acrobat programs, reported net income of 35 cents per share, excluding special items. That matched analysts' estimates.

Revenue dropped 21 percent from the year-earlier quarter but not as much as analysts predicted.

Adobe's forecast for the quarter ending in August also met expectations. The San Jose, Calif. company is projecting 30 cents to 37 cents per share in adjusted earnings on sales of $665 million to $715 million. Analysts polled by Thomson Reuters were looking for 33 cents per share on $676 million.

While sales of the company's Creative Suite 4 — a package of Adobe software programs — have tracked below the previous edition, analysts said the trend could be setting up better demand for Create Suit 5, expected to be released next year.

In a note Wednesday, Jefferies & Co. analyst Ross MacMillan said, "we still believe there is a pent-up demand argument" for the next release. He reiterated a "Buy" rating on shares.

The stock climbed 63 cents, or 2.2 percent, to $28.80 in afternoon trading.