Adobe profit shrinks but subscriptions rise
SAN JOSE, Calif. (AP) — Adobe Systems Inc., the maker of Photoshop and Adobe Reader, said Tuesday that its fiscal third-quarter earnings tumbled 59 percent, but it added subscribers to its Creative Cloud service.
Adobe's shares rose $2.31, or 4.8 percent, to $50.45 in after-hours trading. The stock had closed at $48.14.
The San Jose, Calif., company has been shifting its business to a subscription-based model and said in May that it will no longer release new versions of its Creative Suite software package. It is offering its software as through a subscription service instead.
Adobe earned $83 million, or 16 cents per share, in the three months that ended on Aug. 30. That's down from $201.4 million, or 40 cents per share, in the same period a year earlier. Excluding special items, earnings dropped to 32 cents per share, 2 cents less than analysts predicted, from 58 cents per share.
Revenue fell 8 percent, to $995.1 million from $1.08 billion. Analysts, on average, had expected revenue of $1.01 billion, according to a poll by FactSet.
But subscription revenue rose 73 percent to $299.4 million. The company said Creative Cloud gained 331,000 paying subscribers during the quarter, surpassing 1 million.