Submitted by Fox First at Ten on June 20th
NEW YORK (AP) - Fears about the effect of Europe's slowing economy on Adobe Systems Inc.'s business weighed on the software maker's shares before Wednesday's opening bell.
The maker of Photoshop late on Tuesday posted guidance for the June-August quarter that disappointed investors. It expects profit of 56 cents to 61 cents per share on $1.08 billion to $1.13 billion in revenue. Analysts polled by FactSet predict earnings of 61 cents per share and revenue of $1.13 billion.
Adobe also trimmed its revenue growth target for the year to 6 to 7 percent from 8 percent.
The company is worried that the slowing economy in Europe will hurt demand for its Creative Suite package of software, said Jefferies analyst Ross MacMillan. He said a shift to Creative Cloud, a subscription-based, online version of its software, is also dampening revenue because of the company's promotions.
He backed his "Hold" rating for Adobe.
Others disagree. Analysts are too gloomy about the effects of Adobe's push for its subscription package, said Citi analyst Walter Pritchard. He kept a "Buy" rating on the company, although he acknowledged that its business is sensitive to the slowing global economy.
Shares of the company, which is based in San Jose, Calif., fell $1.89, or 5.8 percent, to $31 in premarket trading.
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