Adobe said Wednesday that it will eliminate 600 full-time positions, or roughly 8 percent of its workforce, amid weaker than expected fourth quarter earnings.
The company said in a statement that it will deliver fourth quarter revenue between $912 million to $915 million, down from its previous outlook of $925 million to $955 million. Wall Street was expecting revenue of $930 million. Earnings excluding items will be 59 cents a share to 60 cents a share. Under generally accepted accounting principles, Adobe said earnings will be 45 cents a share to 46 cents a share. Adobe's earnings were helped by two tax items that boosted earnings by 5 cents a share. Wall Street was expecting earnings of 51 cents a share.
Adobe said demand for Creative Suite 4 was weaker than expected and "the main cause for the shortfall in fourth quarter revenue." Adobe CEO Shantanu Narayen said the global economic downturn hurt revenue.
As for Adobe's restructuring, the company said it will take pre-tax charges of $44 million to $50 million. Adobe also gave guidance for the first quarter of fiscal 2009. It is projecting revenue of $800 million to $850 million with operating margins of 26 percent to 28 percent. Wall Street was expecting a range of $846 million to $1.02 billion, according to Reuters Thomson.