The worsening US economy claimed another IT victim Tuesday, when Adobe said it expects softness in the US market to adversely affect revenue for its first quarter of fiscal 2001. The company didn't provide any specific figures on what its upcoming financials will look like.
The graphic design, imaging and desktop publishing software vendor said in a statement that it's witnessing a slowdown in demand for its products in a number of geographical markets, most notably in the US.
"At this point in the quarter with one month to go, we can see that the deteriorating economy, particularly in the US, is starting to affect us," said Bruce Chizen, Adobe chief executive officer and president, said in the statement.
Adobe is keeping a watchful eye on its spending so that it can meet its current guidance for the first quarter, which closes March 2, Chizen said. The company is due to report its financial results March 15. Analysts expect $0.30 cents a share for the quarter, according to a survey of 13 brokers by First Call/Thomson Financial. Revenue is expected to be $356 million, according to three brokers.
Adobe remains confident that its strategy to build future growth around network publishing is sound, although "the near-term outlook for the economy is uncertain," Chizen said.
Last month, Adobe issued strong fourth-quarter earnings well above analysts' predictions, and announced a shake-up in its top management which saw Chizen become CEO, adding to his role as company president.
At that time, Chizen recommitted Adobe to previously stated revenue growth targets for fiscal 2001, saying the company was confident it could grow its revenue by at least 25 per cent in both the first quarter and fiscal 2001 as a whole.
The company made its announcement as part of an intra-quarter update in line with US Securities and Exchange Commission's (SEC's) fair disclosure rules. Adobe said it will offer such quarter updates on a regular basis in future, at the end of the second month of its fiscal quarters.
Adobe's (ADBE) warning appeared after financial markets closed for the day. In after hours trading, Adobe's shares fell by as much as 16.1 per cent, to $44.25.