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Adobe Up Sharply After Earnings Beat

Adobe Systems (NASDAQ: ADBE) was up more than 4 percent in after hours trading after reporting better than expected earnings. The maker of Photoshop and Acrobat software, reported better than expected quarterly profit and increasing subscriptions for its creative-cloud software.

The company reported headline numbers of $0.36 per share versus analyst consensus of $0.34. Revenue was inline at $1.01 billion.

Net income fell to $76.5 million–15 cents per share. This is down from $223.9 million or 45 cents per share one year earlier. Forward looking guidance was inline with analyst expectations.

It reported that it added 221,000 paid subscribers to its creative cloud software that includes Photoshop, Illustrator, Flash and other titles. Investors were concerned that the company would lose users by pushing these popular titles in a cloud-based environment.

Adobe introduced the Web-based Creative Cloud, which includes the company’s popular design titles such as Photoshop, Illustrator and Flash, in the second quarter of 2012.

In the release, it said that it had 700,000 paid subscriptions at the end of the quarter which boosted subscription revenue. Product revenue fell 26 percent to $6.44 million. Service and support revenue was up 18 percent to $111.1 million.

Adobe had 700,000 paid subscriptions at the end of the period, boosting subscription revenue. But product revenue fell 26 percent to $644.9 million. Service and support revenue grew 18 percent to $111.1 million

Disclosure: At the time of this writing, the author had no position in the equities mentioned.

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