Adobe Systems Inc., the largest maker of graphic-design programs, reported a 41 percent drop in second-quarter profit, lower than analyst’s expectations, after the economy soured the demand from advertising customers.
San Jose-based Adobe said its fiscal second-quarter net income fell to $126 million, or 24 cents a share, from $214.9 million, or 40 cents a share in the same period a year earlier.
The software, which includes Photoshop and Illustrator, accounts for about 60 percent of revenue.
Revenue for the period ended in May fell to $704.7 million from the year-ago quarter's $886.9 million.
Analysts on average had expected Adobe to post earnings excluding special items of 35 cents a share on $694.8 million in revenue, according to Thomson Reuters data.
“We are pleased with the solid profit margin and earnings results we were able to deliver in Q2,” said CEO Shantanu Narayen in a statement. “We continue to invest in our key business initiatives which will drive long-term revenue growth once the economy improves.”
Sales dropped 21 percent to $704.7 million in the second quarter, which ended May 29. Analysts estimated $694.8 million.
Adobe rolled out its fourth version of Creative Suite in September, just as the deepening recession caused businesses to cut their budgets. According to TNS Media Intelligence, total U.S. ad spending fell 14 percent in the first quarter.