Adobe chief steps down
Published: 16 Mar 2001 11:54 GMT
Software maker Adobe Systems announced that its cofounder John Warnock, 60, would step down as chief technology officer, as the company lowered its outlook for the current quarter.
Previously the company had said its 2001 growth would remain unchanged.
Warnock is retiring from Adobe, but will remain co-chairman of the board, alongside co-founder Charles Geschke, who retired last year. "I am confident with the decisions and direction of Adobe's management team and feel it's an opportune time to step down," said Warnock in a statement.
The move comes as Adobe, like many other high-tech companies, acknowledged it will be affected by the slowing US economy. The company beat analysts' estimates but, citing "challenging and uncertain economic environment", Adobe cut its current quarter growth target to 15 percent over the same period last year. The company also said it will not provide guidance for the third and fourth quarters of 2001.
"The potential for a global slowdown causes us to defer providing updated second-half targets until we have better visibility," Adobe chief executive Bruce Chizen said in a statement.
Excluding noncash charges, Adobe reported operating income of $119m (£83m), or 33 cents per share, compared with $89.5m (£64m) in the year-earlier period. A consensus of analysts expected the company to earn 28 cents per share, according to First Call.
Before Adobe lowered its revenue forecast in January, analysts were expecting the company to earn 30 cents per share.
Adobe's first quarter ended 2 March.
Revenue for the quarter climbed 17 percent to $329m (£230m) from $282.2m (£197m) in the same period last year. Analysts polled by First Call expected the company to earn about $344m (£241m).
"Revenue was a little light. [But] with respect to expectations, it's virtually a blowout quarter," WR Hambrecht analyst Bill Lennan said. "There were some people on the street who were calling for a doom-and-gloom scenario."
Lennan said he was surprised -- but not bothered -- by the company's decision not to give guidance for the second half of 2001.
"It is unusual, but it's sort of welcome. I think I'd rather have that than have people give numbers they're not sure they can hit," he said.
In a conference call after the earning's announcement, Chizen said he expects the company's revenue to pick up again as soon as the economy recovers. He dismissed any suggestion that Adobe has lost a significant customer base from the closure of dot-coms in recent months.
"The majority of Adobe's products are used in a broader network publishing environment, therefore we do not believe that issues around dot-coms and Web agencies have had, or will have, a significant impact on our business," he said.
Chizen added that although the company has experienced a slowdown of demand in the United States, there have been no signs so far of slowing in Europe and Japan.
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