Adobe Creative Suite 4 launches next week, could only help earnings

During a conference call with analysts late yesterday, executives from Adobe confirmed that the company is sticking to its schedule of launching its final editions of Creative Suite 4 next week.

Final builds of Adobe CS4 beta components were being discussed on its testers' forums as late as last weekend, and one problem that may not yet be completely resolved even on the launch date -- now expected to be next Tuesday -- concerns the compatibility of extensions made for CS3 with CS4. On testers' forums this week, Adobe claims its development partners have been given plenty of time to make the changeover, though at least one such partner claims it hasn't been given the help it needs from Adobe.

CS4 will support JavaScript extensions and existing JavaScript libraries for the first time, giving extensions access to databases and to Web management tools such as those provided in jQuery. It will also include a utility that should migrate existing CS3-based MXP extensions, though forum managers were telling testers as late as last Saturday not to expect perfectly smooth results with extension translation.

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While developers are scrambling to meet deadlines, on the other end of the building, Adobe executives are applauding their company's financial performance, with revenue for its fiscal third quarter ending last month coming in at $1 million above the high side of projections, at $887.2 million -- a gain of 4% over the previous year's third quarter.

Behind the applause, though, were some negative signs: Operating income was down about 14% annually, to $219 million. The bad economy was not to blame here: Operating expenses were generally higher -- by about 10% annually -- margins (GAAP) declined by about 5% in the last year to 24.7%, and the balance sheet shows a $350 million debt maturity during the quarter.

So Adobe really needs a shot in the arm from CS4. How big a boost does it expect? For its fourth-quarter guidance, the company expects something in the ballpark of $940 million in revenue, a gain of 6% over the quarter just ended.

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