Adobe misses by a mile

Adobe has missed analysts' expectations by $0.11 (£0.06) in its first quarter, returning a profit of $22.9m (£13.87), or $0.33 (£0.2) per share, on sales of $197m (£119m).

Analysts at First Call expected Adobe to report a profit of $0.44 per share and some analysts were predicting profits of as much as $0.46 per share.

Company officials blamed the disastrous quarter on weak demand in Asia and North America as well as a decline in Macintosh platform revenues. Company chairman, John Warnock, said in a statement the company had expected some slowdown in revenue momentum in the quarter because there were no new product releases. That was compounded, he said, by continued softness in the Asian market and weaker-than-expected sales in North America.

Adobe's woeful results are even more disheartening to the thousands of investors who pushed the stock up $3.63 (£2.2) per share, or 8 per cent, to $48 (£29) Thursday before the final numbers were released.

Steve Shepich, an analyst at Olde Discount Corp. in the US, had predicted Adobe would return a profit of $0.46 (£0.27) per share in the quarter. "Obviously, they didn't anticipate this much weakness in North America or the decline in Macintosh sales," Shepich said. "They were at the end of their product cycle, so this is fairly understandable. Still, the performance of the stock and the company hasn't been too strong of late."

In the year-ago quarter, Adobe made $46.4m (£28.12m), or $0.63 (£0.38) per share, to $226m (£136.96m).

The company is expected to release updates for Illustrator, PageMaker and PhotoShop software this summer.

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