Adobe shares slide after disappointing 4Q forecast

NEW YORK - Shares of Adobe Systems Inc. declined Thursday after the maker of popular software like Photoshop, Acrobat and Illustrator gave a disappointing revenue outlook and said it plans to cut 600 jobs, or about 8 percent of its work force.

The San Jose, Calif.-based company blamed weaker-than-expected demand for its new Creative Suite 4 family of products for the revenue shortfall. The software package, which targets professional designers and developers, includes Photoshop, Flash and Web design software Dreamweaver, among other applications. Earlier this fall, Adobe called the suite's launch the most significant in company history.

Adobe's adjusted earnings were above Wall Street's expectations. But it expects revenue between $912 million and $915 million, below the average Street estimate of $930 million. The company forecast earnings, excluding items, 59 cents to 60 cents per share. Analysts, who typically exclude one-time items, projected 51 cents, according to Thomson Reuters.

Kaufman Bros. analyst Barbara Coffey, who has a "Hold" rating on the stock, said to some degree, she's not surprised by the weakness in Creative Suite 4.

"(While) we do think that CS4 is a 'must have' release, in these uncertain times, it does not seem to be a 'must have now' release," she wrote in a note to investors.

The company's shares fell $1.67, or 7.4 percent, to $20.87 in afternoon trading. The stock is down nearly 51 percent since the start of the year.

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