Adobe Systems Inc, the maker of Photoshop, gave a sales forecast that topped analysts\u2019 estimates, signaling that strong demand for its creative products continues to drive growth, even as the company pushes more into software for businesses.<\/p>\n
Revenue in the current quarter will be about $2.42 billion, and profit, excluding some costs, may reach $1.87 a share, the San Jose, California-based company said Thursday in a statement.<\/p>\n
Analysts projected $2.41 billion in sales and earnings of $1.86 a share, according to data compiled by Bloomberg.<\/p>\n
Chief executive officer Shantanu Narayen has sought to boost Adobe\u2019s growth with a two-pronged approach – doubling down in its core creative software and bolstering a suite of business offerings.<\/p>\n
While the company goes toe-to-toe with Salesforce.com Inc. in marketing and e-commerce technology, the digital media products continue to grow at a faster clip. Still, growth rates for the company\u2019s digital media software have slowed, a potential concern for investors, who have pushed Adobe\u2019s shares to a record.<\/p>\n
\u201cCreative Cloud growth is slightly diminished off of its peak growth rates which, in our opinion, should be a key point of interest since this is the bedrock of the company\u2019s competitive strength,\u201d Sterling Auty, an analyst at JPMorgan Chase & Co., wrote in a note ahead of the results.<\/p>\n
Adobe\u2019s creative and digital media segment still represents the majority of its revenue. The company projected sales from the unit will increase about 22 percent from a year earlier in the current period. Division sales grew almost 29 percent in the fiscal fourth quarter of 2017.<\/p>\n
Revenue from the segment climbed 27 percent to $1.61 billion in the period ended Aug. 31.<\/p>\n
To power future growth, the company has launched more mobile apps to boost its appeal among hobbyists. The software maker has also pursued a strategy to make its traditional apps available on mobile devices, starting with Photoshop next year.<\/p>\n
The shares were little changed in extended trading after the results were released. The stock closed at a record $268.52 in New York, and has jumped more than 50 percent this year.<\/p>\n
Total revenue increased 24% to $2.29 billion in the fiscal third quarter. Profit, excluding some items, was $1.73 a share. Analysts estimated sales of $2.25 billion and adjusted earnings of $1.69 a share.<\/p>\n
Sales from the company\u2019s experience cloud unit, which includes marketing, data and e-commerce programs, increased 21 percent to $614 million. The division got a boost from Adobe\u2019s acquisition of Magento Inc in June, which is supposed to match Salesforce\u2019s software that helps manage online commerce.<\/p>\n
San Francisco-based Salesforce bought Datorama Inc. in July, hoping to leverage its artificial intelligence software and existing customers as the company\u2019s marketing battle with Adobe heats up.<\/p>\n