The company's shares rose about 8 percent after initially falling 5
percent in extended trading.
Adobe added 402,000 subscribers for Creative Cloud, which includes
Photoshop, Illustrator and Flash, in the fourth quarter, up from the
331,000 it added in the third quarter.
"Investors are giving Adobe's management team credit for its
progress despite the light profit to this point, and will likely
continue to do so, as long as the number of new cloud subscribers
continue to outpace expectations," Edward Jones' technology analyst
Josh Olson told Reuters.
The company said in September it expects subscriber growth for
Creative Cloud to top 331,000 due to strong demand from corporate
customers.
Adobe has been shifting to Web-based subscription service Creative
Cloud from a licensing model since last year.
Subscription models bring in less money upfront as payment is spread
over the entire period of use unlike traditional packaged software,
but typically ensure more predictable recurring revenue.
Adobe said it expects revenue of $950 million to $1 billion in the
first quarter.
The company forecast adjusted earnings of 22 cents to 28 cents per
share.
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Analysts on average were expecting earnings of 34 cents per share on
revenue of $1.02 billion, according to Thomson Reuters I/B/E/S.
The company's net income fell to $65.32 million, or 13 cents per
share in the fourth quarter ended November 29, from $222.3 million,
or 44 cents per share, a year earlier.
Excluding items, the company earned 32 cents per share, in line with
analysts' estimate.
Revenue fell 9.6 percent to $1.04 billion, slightly above the
estimated $1.03 billion.
Adobe's shares were up at $57.90 in extended trading after closing
at $53.99 on the Nasdaq on Thursday.
(Reporting by Sruthi Ramakrishnan and
Neha Alawadhi in Bangalore; editing by Maju Samuel and Don
Sebastian)
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