Adobe sales surges despite dispute with Apple

Adobe Systems Inc's revenue surged after it launched a new version of its widely used design software, giving the company fuel to back up its claim that sales are not being hurt by a high-profile dispute with Apple Inc.

Apple has forbidden the use of Adobe's widely used Flash software on the iPhone and iPad, saying the technology for delivering audio, video and games is inferior to a standard known as HTLM 5 that competes with Flash.

"We have not really seen any impact" from the dispute with Apple, chief executive Shantanu Narayen said during a conference call on Tuesday.

He said Adobe's Creative Suite 5 software line, which includes Flash programs, was selling better than Creative Suite 4 had in its early days. One of the features in Creative Suite 5 specifically allows developers to write programs for the iPhone and iPad. Apple has banned programs written with that software from use with its hardware.

"Any concerns about the flash dispute affecting CS5 sales should now be put to bed," he said in an interview after the conference call.

Revenue rose 34% from a year earlier to $943 million during the fiscal second quarter ended June 4, handily beating the average analyst forecast of $906 million.

Still, its shares fell 1.4% as profits failed to grow as quickly as sales.

The software maker posted per-share profit, excluding items, of 44 cents, compared with the average analyst forecast of 42 cents, according to Thomson Reuters IBES.

Customers have praised the software, whose titles include Photoshop, Illustrator and Dreamweaver. That is a sharp contrast to CS4, which was released during the depth of the recession in 2008 to lukewarm reviews.

"The product cycle looks great. Unfortunately it's not coming down to the bottom line," said Jefferies & Co analyst Ross MacMillan.

The company posted second-quarter net income of $149 million, or 28 cents per share, compared with $126 million, or 24 cents, a year earlier.

Adobe also forecast current-quarter revenue ahead of Street projections, although its profit outlook was in line with analysts forecasts.

It expects to report quarterly revenue of $950 million to $1 billion, the midpoint of which is ahead of the average analyst forecast of $959 million. It projected profit, excluding items of 46 cents to 50 cents, in line with analysts' forecast of 48 cents.

The company also said its board had authorised the repurchase of up to $1.6 billion of its own stock. The shares of the San Jose, California-based company fell 1.4% to $32.28 in extended trading. They had closed down 39 cents at $32.74 on Nasdaq.