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Tuesday, December 16, 2008
Adobe's Net Rises 11%; Sales Fail to Meet Views
Donna Fuscaldo
FOXBusiness
Adobe Systems (ADBE), the maker of Photoshop and Acrobat software, posted an 11% increase in fourth quarter net income, but sales fell short of Wall Street expectations.
For its fiscal fourth quarter, the San Jose, Calif., design software maker posted net come of $245.9 million or 46 cents a share, compared with $222.2 million or 38 cents in the year ago fourth quarter.
Revenue came in at $915.13 million from $911.2 million in last’s years fourth quarter. Excluding items Adobe posted earnings of 60 cents a share, beating the Thomson First Call estimate of 57 cents. Adobe’s revenue result fell short of the $918.3 million consensus.
Earlier in December, Adobe forecasted fourth-quarter earnings excluding items of between 59 cents and 60 cents a share and revenue between $912 billion and $915 million.
Despite a difficult economic environment in 2008, we were able to achieve record revenue and double digit growth for the sixth consecutive year,” said Shantanu Narayen, president and Chief Executive in a press release. “In addition, our consistent execution and disciplined expense management enabled us to significantly exceed our profit targets.
Narayen did warn that 2009 will be a challenging year but said he is confident the company will emerge from the current recession stronger.
Looking out to its fiscal first quarter, Adobe reiterated it expects revenue of between $800 million and $850 million and GAAP earnings of 30 cents to 35 cents and non-GAAP earnings of 43 cents to 47 cents a share.
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If you¿re like the vast majority of the population, buying a home is the largest personal investment you will ever make. You're buying something that¿s many times your yearly salary with the intention of holding onto that home for many years.
The bank you're going to get the money from to buy that home knows that, too. And if you're going to get a mortgage on a home, the bank wants to know how you're going to pay for said house.
Usually, you give a lot of paperwork to the bank, so the bank can tell if you're able to afford the house or not. You give them bank statements, credit card statements, letters from your employer stating your salary, tax returns, etc.
But, what happens if you may not be the perfect candidate for the home of your dreams? Or, you're buying too much home (the bank thinks you can afford a $200,000 home, you want a $230,000 home). Or, you don't have the money for a down payment. Or, you haven't paid your bills on time in the past. Or, the documents of how you make your salary are not 100% available.
Enter the subprime mortgage. Subprime mortgages are loans given by banks to people who may fall under any one of those above conditions, or others. Why would anyone want a subprime mortgage? Well, homebuyers get subprime mortgages because they get to buy the home they want. Banks give subprime mortgages because they can charge people more money for that mortgage. Remember, the difference in interest rates on a $200,000 or $300,000 home can mean the difference between hundreds of dollars in interest payments.
Still there¿s risk for both the person getting the mortgage and the bank granting it. When the playbook works, the value of the house rises. So, even if Joe Q. Badcredit couldn't afford the house he bought in 2001, at last resort Joe or the bank could sell the home, make a bundle off its increased value, and the bank could get its money back.
The playbook goes out the window, though, when home prices don't increase. Then homeowners run the risk of defaulting and banks lose money. At its worst, homeowners can lose their houses.
If you¿re in the market for a home, and the banker says you qualify for a subprime mortgage, it probably means you need to provide more documentation of how you¿re going to pay for that house. Or, you may be buying too much home. Talk with your banker about why you qualify for a subprime mortgage, and try to fix it.
