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Ahead of the Bell: Adobe shares rise on 4Q view
[September 21, 2011]

Ahead of the Bell: Adobe shares rise on 4Q view

(Associated Press Via Acquire Media NewsEdge) NEW YORK -- Shares of Adobe Systems Inc. got a boost Wednesday after the design and publishing software maker posted better earnings for the fiscal third quarter than Wall Street had expected, helped by growing demand for online video, photos and other digital content on a broad range of devices.

The maker of Photoshop and Flash software also posted an outlook for the current quarter, which ends in December, that mostly topped the average estimate of analysts polled by FactSet.

Citi Investment Research analyst Walter Pritchard raised his target price on Adobe to $34 from $33 and kept his rating a "Buy," saying that Adobe would benefit from growth in content and its different ways of delivering content to users.

But he cautioned that the guidance might be overly optimistic.

Baird analyst Steven Ashley said the guidance assumed "normal" economic activity in the current quarter, "which might raise eyebrows with some investors." Most economists expect the U.S. economy will remain sluggish, with growth between 1.5 percent and 2 percent in the last six months of 2011.

The San Jose, Calif., company posted adjusted earnings of 55 cents per share in the quarter ended Sept. 2, a penny above analysts' expectations.

It expects earnings per share of 57 cents to 64 cents in the current quarter. The average analyst estimate for the fourth quarter was 58 cents per share.

Shares of San Jose, Calif.-based Adobe rose $1.26, or 5.1 percent, to $25.90 in premarket trading. The stock had closed down 63 cents, or 2.5 percent, at $24.64 on Tuesday, before releasing its third-quarter results.

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