And the money just keeps rolling in for Adobe, thanks in part to Acrobat 5. While most technology companies are facing hard times,
Adobe has announced another fine quarter, achieving 15 percent revenue and 25 percent operating profit growth.
In the second quarter of fiscal 2001, Adobe achieved revenue of US$344.1 million, compared to $300.1 million reported for the second quarter of fiscal 2000 and $329 million reported in the first quarter of fiscal 2001. This represents the aforementioned 15 percent year-over-year revenue growth, with application revenue growth of 19 percent. For those into the financial nitty gritty, pro forma diluted earnings per share for the second quarter of fiscal 2001, excluding non-operating gains and losses, were $0.34.
“Given the tough economic environment, I am extremely pleased with Adobe’s financial results in the quarter,” Bruce Chizen, president and CEO of Adobe, said in a press announcement. “Record revenue for Adobe Acrobat 5.0, resulting in 67 percent year-over-year growth in our ePaper Solutions segment, combined with our continued focus on operational excellence, drove another quarter of solid performance.”
Net income, which includes non-operating gains and losses, was $61.3 million for the second quarter of fiscal 2001, compared to $65.8 million reported in the second quarter of fiscal 2000, and $69.8 million in the first quarter of fiscal 2001. Including non-operating gains and losses, diluted earnings per share for the second quarter of fiscal 2001 were $0.25 based on 250.1 million weighted average shares. This compares with diluted earnings per share of $0.26 reported in the second quarter of fiscal 2000, based on 255.3 million weighted average shares, and diluted earnings per share of $0.28 reported in the first quarter of fiscal 2001, based on 253.6 million weighted average shares.
Excluding the amortization of goodwill and restructuring and other charges, Adobe’s operating profit was $121.5 million in the second quarter of fiscal 2001, compared to $97 million in the second quarter of fiscal 2000 and $119 million in the first quarter of fiscal 2001. This represents 25 percent year-over-year operating profit growth. As a percent of revenue, operating profit for the second quarter was 35.3 percent, compared to 32.3 percent in the second quarter of fiscal 2000 and 36.2 percent in the first quarter of fiscal 2001.
There was a slight bit of bad news, however.
“In quarter two, we saw weakness in North America and Europe and we expect this to continue in the third quarter,” Murray Demo, senior VP and chief financial officer of Adobe, said. “Additionally, we are factoring in a potential slowdown in Asia. Because of continued economic uncertainty, as well as a tough year-over-year compare, we are expecting our Q3 fiscal 2001 year-over-year revenue will be approximately flat. Looking to Q4, although our visibility remains low, we believe our year-over-year revenue growth will improve as we enter a new major product upgrade cycle.”
For both the third and fourth quarters of fiscal 2001, Adobe said it continues to target a gross margin of 93 percent and an operating margin of 31 percent. As a percent of revenue, Adobe continues to spend approximately 19 to 20 percent on research and development, 33 to 34 percent on sales and marketing, and approximately 9 percent on general and administrative items.
In addition, Adobe is targeting its share count range to be between 252 and 254 million shares in third quarter of fiscal 2001, and between 254 and 256 million shares in the fourth quarter of fiscal 2001. The company said it continues to target other income to be approximately $4 million per quarter, and a tax rate of 33 percent for the remainder of the fiscal year.