Adobe delivers solid quarter; CS 5 sales strong out of gate

Adobe, which is betting on a strong upgrade cycle for its Creative Suite, delivered solid second quarter earnings and an upbeat outlook.

Update: Adobe, which is betting on a strong upgrade cycle for its Creative Suite, delivered solid second quarter earnings and an upbeat outlook. The company added that sales of its latest Creative Suite should be strong through 2010 and into 2011 as large customers upgrade.

The company reported fiscal second quarter earnings of $148.6 million, or 28 cents a share, on revenue of $943 million, up 34 percent from $704.7 million a year ago. Non-GAAP earnings were 44 cents a share. Wall Street was expecting earnings of 42 cents a share on revenue of $905 million.

In a statement, Adobe CEO Shantanu Narayen credited a "successful launch of Creative Suite 5" for the results. Indeed, Adobe's product revenue for the three months ended June 4 checked in at $795.3 million, up from $648 million in the year ago quarter.

On a conference call, Narayen said the early sales of CS 5 were strong. "CS 5 sales were particularly strong in the early part of the cycle," he said. "Adoption of CS5 should remain strong through end of this year and into next year as large customers adopt it." Later, Narayen said Adobe's goal is to have $5 billion in revenue by 2012, up from an estimated $3.7 billion for fiscal 2010. He added that Adobe's Flash spat with Apple hasn't hurt sales.

As for the outlook, Adobe projected non-GAAP earnings of 46 cents a share to 50 cents a share with revenue between $950 million to $1 billion. Wall Street was expecting earnings of 48 cents a share on revenue of $958.7 million.

Here's Adobe's guidance in detail:

Adobe also said it has authorized a $1.6 billion share repurchase program through fiscal 2012.

Earlier, Adobe unveiled Flash 10.1 for mobile players. For more on Flash see:

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