Adobe adds fewer-than-expected Creative Cloud subscribers, shares fall
Photoshop maker Adobe Systems Inc reported a lower-than-expected rise in subscriptions for its Creative Cloud software suite and forecast a second-quarter profit that missed the average analyst estimate.The company's shares fell nearly 4 percent in after-hours trading on Tuesday.Adobe said it added about 517,000 Creative Cloud subscriptions in the first quarter, compared with the 573,000 net additions that analysts were expecting, according to research firm StreetAccount.The Creative Cloud offering includes Photoshop, Illustrator and Flash software.The company forecast an adjusted profit of 41-47 cents per share for the second quarter, below the average analyst estimate of 48 cents, according to Thomson Reuters I/B/E/S.Adobe's revenue forecast of $1.13 billion-$1.18 billion was also largely below the average analyst estimate of $1.18 billion. "If you go back and look at the last several quarters, they have given conservative revenue and earnings guidance ... and ... tend to end up beating what that lower bar is," FBR Capital Markets analyst Samad Samana said.Adobe is switching from traditional box licenses to web-based subscriptions for its Creative Cloud software bundle to help attract more predictable recurring revenue. Online subscriptions let customers access the latest software versions for a monthly payment.Earlier on Tuesday, Adobe unveiled the Document Cloud, which includes Acrobat DC, a new subscription service for PDF editing software Acrobat.Acrobat DC allows users to create, edit and track PDF documents online across multiple devices. It also includes an e-signing tool and lets users convert paper documents into digital files that can be edited.The Document Cloud will be available within 30 days, Adobe said. It will be offered to Creative Cloud subscribers as part of their existing plan. The company will also offer a perpetual license for Acrobat DC.Adobe's net income rose to $84.9 million, or 17 cents per share, in the first quarter ended Feb. 27, from $47 million, or 9 cents per share, a year earlier.Excluding items, the company earned 44 cents per share, beating the average analyst estimate of 39 cents.Revenue rose 11 percent to $1.11 billion, above analysts' average estimate of $1.09 billion.Up to Tuesday's close, the company's shares had risen about 17 percent in the last 12 months.