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Adobe beats the Street
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September 14, 2000: 6:09 p.m. ET
Graphic software firm beats forecast by a nickel, sets 2-for-1 split
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NEW YORK (CNNfn) - Graphic design software maker Adobe Systems Inc. reported a fiscal third-quarter operating profit Thursday that beat Wall Street's expectations by a nickel. The company also set a 2-for-1 split of its common stock.
Citing strong demand for its Internet publishing software, the San Jose, Calif.-based company posted an operating profit of 57 cents per share for the three months ended Sept. 1.
That's up from earnings of 40 cents per share in the same period last year and 5 cents better than the 52 cents per share analysts had anticipated.
Revenue rose 26 percent to $328.9 million.
Net income, which includes non-operating gains and losses, was $78.3 million, or 61 cents per share.
Adobe (ADBE: Research, Estimates) stock slipped 56 cents to $125.38 in regular trading. After the profit report was released, shares jumped $1.50 to $126.88 in after-hours trading.
 The company also said it is increasing its operating model targets. In the fourth quarter of fiscal 2000, and in fiscal year 2001, Adobe is now targeting a gross margin of 93 percent and an operating margin of 31 percent.
Executives at Adobe in San Jose, Calif., attributed the quarter's results largely to continued growth in demand for the company's Internet-related graphic design software.
"We continue to benefit from explosive growth of content on the Internet," John E. Warnock, Adobe's chairman and chief executive said in a teleconference Thursday evening.
Sales of Adobe's "Acrobat" software, which is used widely in converting various types of documents for publication on the Web, rose 47 percent from the same period a year earlier, Warnock said.
Looking ahead, Adobe executives said the company is on track to post annual revenue growth of 25 percent in the fiscal fourth quarter this year and anticipate continued strong revenue growth in the coming fiscal year.
"We are targeting at least 25 percent annual revenue growth in fiscal 2001," said Murray Demo, the company's chief financial officer.
Adobe's board of directors also declared a 2-for-1 stock split payable on Oct. 24 to stockholders of record as of Oct. 2. 
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Adobe Systems
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