Adobe Systems, the world's largest maker of graphics and Web-design software, forecast sales that trailed analysts' estimates, saying the...
Adobe Systems, the world’s largest maker of graphics and Web-design software, forecast sales that trailed analysts’ estimates, saying the global economic crisis has hurt spending.
The company also plans to cut 600 jobs, about 8 percent of its global work force at the end of the third quarter. It has about 500 workers in Seattle.
Sales in the first quarter ending in February probably will be between $800 million and $850 million, Adobe said Wednesday. That misses the $928.8 million average estimate compiled by Bloomberg.
Fewer customers than expected bought the Creative Suite 4 design products, Adobe said. The software maker gets more than half of revenue from outside the U.S., so the gain in the U.S. dollar is also curbing sales.
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“They are assuming the worst-case scenario and are clearly planning for that with the work-force reductions,” Robert Breza, an analyst with RBC Capital Markets, said from Minneapolis. “They sell to advertising professionals, and advertising and media dollars are being cut dramatically.”
Breza has a “neutral” rating on the shares and said he doesn’t own any.
Sales in the fourth quarter ended Nov. 28 probably were as high as $915 million, also short of projections. Analysts on average predicted $926.8 million, according to a Bloomberg survey.
Last month, Chief Executive Officer Shantanu Narayen said he expected the financial crisis to curb sales soon.
Adobe fell $1.57, or 7 percent, to $20.97 in extended trading. The stock, down 47 percent this year, rose 54 cents to $22.54 in regular trading Wednesday.
The company also said profit was 45 to 46 cents a share, according to a statement. Excluding compensation and other costs, profit was 59 to 60 cents, topping the average analyst estimate of 51 cents.
The San Jose, Calif., company will give full results Dec. 16.