Adobe Systems said Tuesday the global downturn cut sharply into fourth-quarter sales of its latest graphic-design software and that it was preparing for a difficult year ahead.
Sales of the recently launched Creative Suite 4 bundle of products, including the popular Photoshop and Illustrator, were 20 percent lower than for the previous Creative Suite 3.
Adobe to spark demand for Creative Suite 4, says Shantanu Narayen
Looking ahead, “given the economic climate, we believe Creative Suite 4 adoption in the short term will be muted,” CEO Shantanu Narayen said on a conference call with analysts.
As a result, the company said it was taking austerity measures to focus resources and cut costs. It also affirmed that first-quarter revenue could be down 7 percent or more, giving rise to fears among analysts that sales for fiscal year could be lower, too.
The downturn is “more global than we saw in the 2001 and 2002 time frame,” Narayen said. Adobe did not provide an annual forecast.
The company’s strategic priorities for navigating the downturn include:
*Promoting Flash as the preferred multimedia software for the Web;
*Investing in its flagship Creative Suite and Acrobat software;
*Highlighting its fast growing LiveCycle, Connect Pro and Scene7 products;
*Remaining consistently profitable; and
*Cutting expenses for travel, salaries and contractors.
The weakness in Creative Suite revenue was largely tied to shrink-wrapped, or retail, sales and not license sales to companies, said Narayen. The company will work to spark in-store demand, he said.
Adobe’s fourth-quarter report was consistent with a financial warning the company issued early this month lowering sales targets and unveiling a cost-cutting program with about 600 layoffs, or 6 percent of the workforce.
