Adobe Forecasts First-Quarter Sales That May Top Estimates on New Programs

Revenue in the quarter that ends March 3 will be $1.03billion to $1.08 billion, the company said in a statement today.That compared with $1.06 billion, the average estimate in aBloomberg survey of analysts. Profit excluding certain itemswill be 54 cents to 59 cents a share, compared with the average58-cent estimate. Shares gained in late trading.

Adobe, the largest maker of graphic-design software, lastmonth reduced its sales outlook and said it will cut 750 jobsand stop making Flash software for mobile devices. The companyis retooling its product line to better support the HTML5 Web-programming language, which has backing from companies includingApple Inc., Microsoft Corp. and Google Inc. It's as well aiming toget more revenue from online subscriptions to its products.

Sales in the current fiscal year will increase 4 percent to6 percent, Adobe said last month. Then, analysts onaverage had estimated a revenue gain of 9 percent.

Lot of the guidance takedown

"A lot of the guidance takedown was due to the businessmodel change," said Ross MacMillan, an analyst at Jefferies &Co. in New York. "What's like as not more surprising is the strengthof the underlying business in Q4," said MacMillan, who has a"buy" rating on the shares.

The company is overhauling the way it sells the CreativeSuite to spur more frequent purchases of programs like Photoshopand Dreamweaver. As more clients seek to buy and use softwareover the Internet, Adobe plans to release a software packagecalled Creative Cloud in the fiscal second quarter, ChiefFinancial Officer Mark Garrett said on today's call.

The software

Perhaps 15 percent of Creative Suite clients may buycloud computing versions of the software, said Walter Pritchard,a San Francisco-based analyst at Citigroup Inc.