Adobe Systems, the world's biggest maker of graphic-design software, said fourth-quarter profit increased 38 percent on continued demand...

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Adobe Systems, the world’s biggest maker of graphic-design software, said fourth-quarter profit increased 38 percent on continued demand for new versions of its Photoshop and Illustrator programs.

Also, in the wake of its recent acquisition of Macromedia, Adobe is cutting about 10 percent of the workers in the combined company, or between 650 and 700 jobs.

An Adobe spokeswoman said the cuts are spread across both companies and at all their locations. She would not specify how many in the Seattle operation may be affected.

Net income rose to $156.3 million, or 31 cents a share, from $113.5 million, or 23 cents, a year earlier, Adobe said Thursday. Sales increased 19 percent to $510.4 million in the period ended Dec. 2.

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Demand for the Acrobat document-exchange program and Creative Suite 2, a software package released in April that includes Photoshop and Illustrator, drove sales, said Adobe President Shantanu Narayen. Profit margins widened as the company kept a lid on costs such as sales and marketing, which increased less than 5 percent.

Adobe shares soared $1.32 in extended trading after adding 41 cents to end the regular session at $34.93.


Disappointing database sales,

rising acquisition costs trim profit

Oracle, the world’s third-largest software maker, said second-quarter profit declined 2 percent as new database sales missed analysts’ estimates and costs from acquisitions mounted.

Net income fell to $798 million, or 15 cents a share, from $815 million, or 16 cents, a year ago, Oracle said. Sales rose 19 percent to $3.29 billion. Excluding purchase costs, profit was 19 cents.

New database license sales trailed Oracle’s business applications, the division where Chief Executive Officer Larry Ellison has spent $12 billion on purchases this year including the takeover of PeopleSoft in January. Ellison is fighting a price war with Microsoft over databases, which accounted for 75 percent of Oracle’s new software orders.

“It’s a competitive database market with Microsoft getting involved,” said Brendan Barnicle, an analyst with Pacific Crest Securities in Portland. He rates the shares “sector perform” and said he doesn’t own them.

“We’ve seen a maturing of the database, which is why the aggressive move into the applications market, which is not all that healthy either.”

Oracle shares added 2 cents to $12.83 at the end of the regular trading session. In extended trading, shares fell 35 cents. The stock has fallen 6.5 percent this year.

Compiled from Bloomberg News. Information on job cuts at Adobe provided by Reuters and Seattle Times business staff.