Updated from April 30

Macromedia ( MACR) ontinues to shine Thursday morning, soaring 26% on positive earnings and optimistic guidance.

In recent trading, the developer of flash software tools and applications was up $3.31 to $16.01. In less than half a day's trading, more than 5.8 million shares had been traded, compared to the average full-day volume of just under 1 million shares.

On Wednesday the company announced that it had returned to annual profitability in fiscal 2003 on the strength of increased sales.

Earnings and revenue beat Wall Street's expectations.

Net revenue in the fourth quarter of fiscal 2003 was $83.6 million, up 10% from $76.3 million in the year-ago quarter. Net earnings were 11 cents a share, compared to a loss of $1.42 last year, according to generally accepted accounting principles.

For the full year, Macromedia earned a GAAP profit of 3 cents a share, compared to a loss of $5.31 a year ago. Last year's loss contained numerous items, including $114 million in costs associated with the March 2001 acquisition of Allaire.

"We made a lot of progress this year, returning to revenue growth and profitability while investing strongly in new lines of business," said Rob Burgess, chairman and CEO of Macromedia, in a prepared statement.

On a pro forma basis, the company earned 13 cents a share for the quarter and 40 cents for the year.

Analysts polled by Thomson Financial/First Call expected the company to earn 12 cents in the March quarter on revenue of $82.19 million, and 39 cents a share on revenue of $334.2 million for the full year.

Looking forward, the company expects revenue in the June quarter (the first of fiscal 2004) to range from $80 million to $85 million, compared to Wall Street's expectations of $81.97 million; annual revenue is expected to grow 10% to 20%. Macromedia does not offer EPS guidance, but analysts are expecting a quarterly pro forma profit of 12 cents and an annual profit of 52 cents.

In a call with analysts following the postclose announcement, Burgess said this year the company will leverage the wide acceptance of Flash to launch and see revenue from new products, including applications tailored for use on Pocket PCs and DoCoMo's new 3G services, along with applications for Web advertising and Web-based presentations.

Sounding a cautious note, analyst Gene Munster of US Bancorp Piper Jaffray, said reaching the company's growth target of 10% to 20% in fiscal 2004 "will require some work. How Will We Know If Macromedia Is On-Track? "Watching NPD data will give us a feel for the trends in the core product lines. Also, we will need to know that upgraded MX products will be out by the end of CY03 to feelcomfortable that the upgrades will have the time required to provide Macromedia with enough potential for growth entering the back-half of FY04," he wrote in a note to clients Thursday morning.

Piper Jaffray has a banking relationship with Macromedia.

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