Adobe's 1Q profit slides on charges, lower revenue

Adobe Systems Inc.'s profit fell nearly 28 percent in its fiscal first quarter, as the maker of Photoshop software racked up one-time charges and revenue declined. But Creative Cloud subscriptions grew and results trumped Wall Street's expectations.

The San Jose, Calif., company said Tuesday that its net income fell to $47 million, or 9 cents per share, for the three months ended Feb. 28. That compares with net income of $65.1 million, or 13 cents per share, in the comparable quarter the year before.

Excluding the impact of stock-based pay and other one-time items, Adobe's first-quarter earnings amounted to 30 cents per share, 5 cents more than analysts predicted.

Adobe's revenue slipped less than 1 percent to $1 billion. Wall Street was expecting $973.1 million, according to FactSet.

The company has been shifting to cloud-based software that users subscribe to, such as Creative Cloud, from physical products. Its subscription revenue grew 89 percent to $423.6 million, while product revenue fell 30 percent to $471.5 million.

Adobe ended the quarter with 1.8 million paid subscriptions for its Creative Cloud service, an increase of about 28 percent from three months earlier.

Shares ended regular trading up 35 cents at $68.52. The stock added 25 cents to $68.77 in after-hours trading.