Sept. 21 (Bloomberg) -- Adobe Systems Inc., the largest maker of graphic-design software, rose in U.S. trading after its sales forecast topped analysts’ estimates, boosted by demand for creating content and digital marketing.
Sales will be $1.08 billion to $1.13 billion in the fourth quarter, San Jose, California-based Adobe said yesterday in a statement. That beat the average $1.07 billion estimate of analysts, according to Bloomberg data. Excluding some items, profit will be 57 cents to 64 cents a share, compared with the 58-cent projection of analysts.
The forecast reassured investors who were concerned that the economic slump had sapped demand for Adobe’s products, said Chad Bartley, an analyst at Pacific Crest Securities Inc. in Portland, Oregon. Adobe, which sells software for designers and photographers, as well as programs that help corporate customers manage documents, had seen shares tumble 20 percent this year.
“There were concerns that the environment was difficult and demand trends were starting to deteriorate,” said Bartley, who has an “outperform” rating on Adobe’s shares. “The guidance looks pretty strong.”
The shares rose 25 cents, or 1 percent, to $24.89 at 4 p.m. New York time on the Nasdaq Stock Market. Adobe has dropped 19 percent this year.
“Expectations were pretty low,” Bartley said.
Adobe still faces challenges, including shrinking support for its Flash technology. The software, which creates animation and video on the Web, has been shunned by Apple Inc. and now Microsoft Corp. says the new design for Windows 8 won’t allow the use of Flash in its Internet Explorer 10 Web browser. Another version of the browser that relies on the older design of Windows will still run Flash.
To cope with the shift, Adobe is adapting its products to support the increasingly popular HTML5 programming language in addition to Flash. Tools for developing HTML5 programs may eventually become part of the company’s flagship Creative Suite, said Chief Executive Officer Shantanu Narayen.
“We’re doubling down our investment in this area,” he said on a conference call.
The changes could help Adobe’s prospects in the long run, said Ray Valdes, an analyst at Stamford, Connecticut-based Gartner Inc.
“Adobe has gotten the message,” he said. “They realized the world is changing and they needed to move in the direction of HTML5 and Web standards.”
In a separate statement, Adobe said it will release new versions of its Flash and Air software next month for building games and video on the Web. Flash Player 11 runs applications built with Adobe tools in a Web browser, while Air 3 delivers Web content that looks like a traditional computer program.
They will let developers create 2-D and 3-D games and deliver HD videos to personal computers, smartphones and tablets, Adobe said.
Third-quarter profit also topped estimates, even as it declined from a year earlier. Net income fell 15 percent to $195.1 million, or 39 cents a share, from $230.1 million, or 44 cents, a year ago. Excluding some costs, earnings were 55 cents, compared with the 54 cents predicted by analysts.
Sales rose 2.3 percent to $1.01 billion in the period, which ended Sept. 2. Analysts had projected $1.03 billion on average.
To contact the editor responsible for this story: Tom Giles at firstname.lastname@example.org