Adobe Systems (Nasdaq: ADBE) rose US$3.13 to $28.13 in morning trading Friday after the software maker reported first-quarter results that exceeded analysts' expectations.
In January, Adobe lowered its outlook for the quarter, saying a "deteriorating economy" was hurting business, particularly in the United States.
The San Jose, California-based software company said revenue for the quarter ended March 2nd rose to $329 million from $282.2 million a year earlier, while earnings before extraordinary items totaled 33 cents per share. Net income rose to $69.8 million, or 28 cents per share, from $64.6 million, or 26 cents.
"Although we are disappointed in not meeting our original revenue target, we did demonstrate our ability to proactively manage our business," said president and chief executive officer Bruce R. Chizen.
Adobe did lower its targets for the second quarter, and declined to project results for the rest of the year, citing "the challenging and uncertain economic environment." The company said it expects revenue for the current quarter to grow by about 15 percent over last year.
"Although we do not currently see a major slowdown in our business 
in Europe
and Japan, the potential for a global slowdown causes us to defer providing
updated second-half targets until we have better visibility," Chizen said.
Adobe also said directors authorized the repurchase of 5 million shares.
Prudential Securities repeated a strong buy rating on Adobe shares following the news, saying the results were better than expected and the buyback "is likely to be viewed as an upside surprise."
Credit Suisse First Boston reportedly upgraded Adobe shares to buy from
hold.
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