Adobe posts profit leap as Apple bans Flash
Graphics-software company Adobe Systems recorded an 18 per cent leap in second-quarter profit, gaining from strong sales of its flagship Creative Suite 5.
Adobe, which owns Photoshop and Illustrator products, is also projecting third-quarter earnings of US46 cents to US50c a share on revenue of $US950 million ($1.1 billion) to $US1 billion. Analysts surveyed by Thomson Reuters forecast US48c and $US959m, respectively.
Released in April, CS5 combines Photoshop and a host of other applications. Analysts were encouraged by the package's release, driving a 34 per cent year-on-year revenue growth.
Adobe also gave a longer-term projection of $US5bn in sales for 2012, though margins are forecast to be similar to what they will be at the end of 2010.
The strong long-term forecast was based on solid demand for Adobe products. The company said its latest software package was surpassing the previous version by 15 per cent and that sales for CS5 software bundles containing Flash tools have increased 22 per cent over the older release during the same period.
Strong sales come against a backdrop of conflict between Adobe and former ally Apple. The latter is freezing one of Adobe's core products from its iPhone and iPad devices.
Apple CEO Steve Jobs has criticised Adobe's Flash technology, which is employed to format most online videos and prohibited it from his company's machines.
Mr Jobs posted a strongly worded criticism of Flash on the company's website in April to which Adobe answered with newspaper ads and a media campaign.
Adobe launched a version of Flash for mobile equipment, most notably running Google's Android on Monday. Executives of the company told analysts that they expect millions of devices to ship with Flash software in this year's second half.
"Those that don't have Flash on their smartphones will wish they did," said Adobe CEO Shantanu Narayen.