Adobe 4Q Results Beat the Street

Features Reuters

Photoshop maker Adobe Systems Inc said it would buy stock photography company Fotolia for $800 million and reported quarterly revenue above market estimates, helped by higher subscription sales of its Creative Cloud suite.

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Adobe shares were up nearly 8 percent in extended trading.

The company said it would integrate Fotalia, a marketplace which offers royalty-free stock photos and video, with Creative Cloud to raise average revenue per user at the business.

Adobe also plans to continue Fotolia as a standalone service. (http://adobe.ly/1BiKq40)

The company also said it expected an adjusted profit of 34-40 cents per share on revenue of $1.05 billion-$1.10 billion for the first quarter ending Feb. 28. (http://adobe.ly/1ut3Luu)

Analysts on average were expecting 39 cents per share in profit on $1.10 billion in revenue, according to Thomson Reuters I/B/E/S.

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Adobe has been switching to web-based subscription for its Creative Suite 6 from traditional box licenses to attract more predictable recurring revenue.

The company said it expected new Creative Cloud subscriptions to decline in the current quarter from the 644,000 it added in the fourth quarter ended Nov. 28.

Creative Cloud includes the popular Photoshop, Illustrator and Flash software. Online subscriptions let customers access the latest versions of a host of software for a monthly payment.

Adobe's fourth-quarter net income rose to $73.3 million, or 14 cents per share, from $65.3 million, or 13 cents per share, a year earlier.

Excluding items, the company earned 36 cents per share, higher than the analysts' estimate of 30 cents per share.

Revenue of the company, whose products are some of the most pirated in the world, rose to $1.07 billion, while analysts had expected $1.06 billion.

Adobe shares were trading at $75.10 after markets closed on Thursday. (Reporting by Anya George Tharakan in Bengaluru; Editing by Joyjeet Das)

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