Adobe slashes revenue forecast
Adobe, one of the largest US software companies, yesterday provided the latest indication of how the economic crisis is rolling through the technology industry as it slashed its revenue projections and announced that it had already "taken steps" to cut its workforce by 8 per cent, or 600 people.
The company, whose software is used widely in the creative industries, has carried greater exposure to a downturn in advertising than many other software companies, and comments from the company yesterday suggested this was a big source of its earnings shortfall.
Adobe's latest quarter ended on November 28th, making it the most up-to-date barometer of the spreading weakness in information technology. It is also a potential indicator of a broader downturn when most other companies report at the end of this month.
Revenues for the current quarter, to the end of February, could be as much as 14 per cent lower than Wall Street had been expecting, according to the company's latest forecast. It put likely revenue for the period at $800-$850m, compared to the $930m consensus expectation of analysts.
It also said that it expected to report revenues of $912-$915m for the three months to the end of November, compared to its earlier target range of $925-$955m.
Shantanu Narayen, chief executive officer, blamed the shortfall on the global economic crisis and said the company had already taken steps to reduce its costs.
Leaving aside one-off items for the period, which boosted reported earnings, Adobe indicated that its earnings would still have slightly beaten analysts' expectations for the period, despite the revenue shortfall.
The company said that "weaker-than-expected demand for its Creative Suite 4 family of products"had been behind the disappointing results.
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