Adobe results weak, but makes its Q1 targets

The first quarter of 2009 was, as predicted two weeks ago, soggy for Adobe Systems, which on Tuesday reported revenue of $786.4 million for the period ending February 27. That's under the company's original Q1 estimate of $800-$850 million, but a shade above the revised prediction of $783-$786 million.

According to president and CEO Shantanu Narayen, demand for CS4 continues weak, though awareness and interest in the product family is still high. (Random fact: Suites account for 68% of CS4 revenues.) To attempt to convert that interest to sales, the company said it will extend its introductory pricing on CS4 until April 30.

LiveCycle's doing well, with 18% year-over-year growth, and the cumulative total of Acrobat licenses out in the world has risen 6 million in the past year to 36 million. Adobe AIR, meanwhile, is getting to be as ubiquitous as you-know-what, with 100 million installations, and the company expects that it will soon report the billionth installation of Flash Life on a mobile device.

GAAP earnings results for the firm weighed in at 30 cents per share, down eight cents year-over-year and 16 cents from Q4 2008. GAAP operating income was $207.9 million, down sharply year-over-year (from $275.4 million) and from the previous quarter ($273.2 million). The company cracked the whip on expenses, and so Q4 net income came in at $156.4 million, down from $219.4 million year-to-year and $245.9 million from Q4 '08.

Analysts had some questions about that whip-cracking, asking if the company is cutting back on long-term development to make its short-term numbers. Narayen countered that the savings mainly came from cutting back on expenses such as travel, reducing consultant head count, and reorganizing some internal functions, and that the company was committed to balancing long- and short-term goals -- but said that he's keeping an eye on things as the economy unfolds.

For second quarter, Adobe is targeting revenue of between $675 million and $725 million, with GAAP earnings-per-share of 20-27 cents (31-38 cents non-GAAP).