CS First Boston Maintains Buy on Adobe

Analyst Gibboney Huske says the first quarter was a mixed bag for the company

Adobe Systems (ADBE ) reported $0.20 first quarter earnings per share (under GAAP) on 19% lower revenues. The company sees $0.24-$0.27 second quarter EPS (pro forma) on $305-$325 million in revenues. CS First Boston maintains its buy rating on the shares.

Analyst Gibboney Huske says the first quarter was a mixed bag for Adobe; with revenue slightly below her estimate and EPS slightly above. She raised her $311.7 million second quarter revenue estimate to $320.7 million to account for Adobe's acquisition of Accelio and trimmed her $0.28 second quarter EPS estimate to $0.27. For fiscal 2002 (ending November), she raised her $1.18 billion revenue estimate to $1.21 billion, leaving her EPS estimate at $0.95. Huske says Adobe did not address second half guidance. She notes that Photostop 7 launches in April, after which the company likely will revisit its guidance. The analyst says her scenario analysis suggests Adobe's risk/reward relationship is best under a stock price of $38.

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