Adobe Systems Inc allayed investor concerns over slowing sales in Europe as it forecast market-topping fourth-quarter revenue, sending its shares up 7 percent in extended trade.
The company, which had warned in June of weakness in demand for its applications in Europe, said it expects adjusted profit of 57-64 cents a share, largely topping analysts' forecast of 58 cents, according to Thomson Reuters I/B/E/S.
Adobe, which reported third-quarter revenue below expectations, projected sales of $1.08-$1.13 billion for the fourth quarter, ahead of the average forecast of $1.07 billion.
The quarter was at the low-end in terms of revenue. I think there were some challenges there during the quarter, said Pacific Crest Securities analyst Chad Bartley.
The stock is rallying after market, however, because their fourth-quarter guidance is very strong and that is surprising people.
The world's largest design software maker, known for its Flash media player, Omniture web analytics software and Acrobat document manipulation application, gets about 30 percent of its revenue from Europe.
Over the past few months, businesses have been singed by the financial crisis in Europe, which has seen numerous sovereign rating downgrades and financial rescues for Greece, Portugal and Ireland.
We will achieve our 10 percent annual revenue growth target as well as earnings growth of 20 percent for the fiscal year, Shantanu Narayen, chief executive of Adobe, said in a statement.
For the fiscal third-quarter, net profit fell to $195.1 million, or 39 cents per share, from $230.1 million, or 44 cents per share, in the year-ago quarter.
Excluding items, it reported a profit of 55 cents per share. Wall Street expected 54 cents per share, on average, according to Thomson Reuters I/B/E/S.
Sales rose 2 percent to $1.01 billion. Analysts were expecting $1.03 billion. Product revenue fell 2 percent to $815 million in the quarter.
Shares of the company were up $1.16 in after-market trading on Nasdaq, after closing at $24.64 earlier in the day.