Adobe forecasts subscription increases and slower revenue
Adobe has reported that earnings for its current quarter will remain flat or decline as customers have signed up for its Creative Cloud subscription services at a faster than expected rate. On this basis, Adobe has predicted Q4 earnings of between 53-58 cents per share on expected revenus of between $1.075 and $1.125 billion, falling shy of analysts' estimates. This reflects an expected 25,000 additional Creative Cloud subscribers. Although the flock to a monthly subscription service hurts short-term revenue, Edward Jones analyst Josh Olson says, 'The long term takeaway is that it's a good thing.'
Adobe launched Creative Cloud in April, providing access to its CS6 suite of imaging, editing and design tools including Photoshop and Lightroom 4 on a monthly subscription, rather than ownership basis. Subscribers can download and install as few or as many of Adobe's CS6 applications as they require and utilize 20GB of online file storage space.