The software maker said sales of its flagship Creative Suite 5 product, which includes a package of programs such as Photoshop, Illustrator and Dreamweaver, have been down due to lackluster demand in the US education market, its largest sector, and Japan, its largest geographic market after the US.
Adobe expects revenue from the creative solutions business to be flat to slightly down in the current quarter, as compared with the earlier period, leading the company to provide a worse-than-expected fourth-quarter forecast.
The company said it expects non-GAAP earnings to range between 48 and 54 cents a share, weaker than the prior quarter earnings, with earnings between $950 million to $1 billion, matching its forecast for the previous quarter.
Analysts polled by Thomson Reuters had on average expected earnings of 53 cents a share and $1.03 billion, respectively.
Despite the weak forecast, which led to several analyst downgrades, the San Jose, California-based company posted third-quarter net income of $230.1 million, or 44 cents a share, compared with $136 million, or 26 cents a share, in the same quarter last year.
The results were ahead of average analyst estimates of 49 cents, according to a Thomson Reuters poll.
Revenue for the software maker was a record $990.3 million, up 42% from $697.5 million a year ago, and beating the Street’s view of $984.07 million.
Adobe CEO Shantanu Narayen said the record revenue and improved earnings are attributable to “strong performance” in each of the company’s major businesses.
“We remain bullish about Adobe’s long-term role in enabling the transformation of content and applications across industries,” he said.