Adobe Beats the Street, Names New CEO

Adobe Systems Inc. bucked recent industry trends Thursday by issuing fourth-quarter results well above analysts' expectations. Adobe preceded the positive financial results by announcing a reorganization in its upper management.

The publishing software maker posted operating profit of US$127.5 million for the quarter. This compares with a profit of $90.9 million for the same period last year and translates to 34 cents per share in earnings, excluding one-time gains and amortization of goodwill. Analysts polled by First Call/Thomson Financial had predicted Adobe would make 29 cents per share.

For the entire fiscal year, Adobe racked up profits of $287.8 million or $1.13 per share. This came on $1.26 billion in revenue, representing 25 percent year-over-year growth, according to a company statement.

John Warnock, co-founder and former chief executive officer (CEO) at Adobe, will take on the role of chief technology officer. Bruce Chizen will become CEO and will join the board of directors. Chizen has served as president of Adobe since April of this year and will also retain that title.

Warnock said the move should allow him to focus on the creative side of software development, which is his primary passion. He had considered making the move for some time, according to a statement.

Founded in 1982, Adobe specializes in software for publishing. Its products include the applications Photoshop, Acrobat, Illustrator, FrameMaker, LiveMotion and GoLive.

Although many vendors issued revenue warnings over the last two weeks, Adobe appears ready to continue its profitable ways. The company reaffirmed previous revenue growth targets for 2001.

"Despite some reports of an industry slowdown, we continue to see strong growth in the Network Publishing economy -- principally driven by the Internet," Chizen said in the company's statement. "We are confident we can grow our revenue at least 25 percent in the first quarter and for the full fiscal year."

Adobe shares dropped more than 13 percent on Thursday to $57.31, following a rating downgrade by Morgan Stanley Dean Witter. After posting its financials, however, Adobe made a slight recovery in the after-hours markets, gaining as much as 5 percent from its close.

Adobe, in San Jose, California, can be reached at +1-408-536-6000 or

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