Adobe Systems Incorporated today provided a business update for its fourth quarter fiscal year 2011, ending Dec. 2, 2011. The company also announced plans to further align its business around the explosive growth categories of Digital Media and Digital Marketing solutions.
Adobe Restructures to Align Business around Growth Opportunities
Adobe is investing aggressively in Digital Media and Digital Marketing, two growing market areas. In Digital Media, the company is the industry leader in content authoring solutions, enabling customers to create, distribute and monetize digital content. In Digital Marketing, the company intends to be the leader in solutions to manage, measure and optimize digital marketing and advertising.
In order to better align resources around Digital Media and Digital Marketing, Adobe is restructuring its business. This will result in the elimination of approximately 750 full-time positions primarily in North America and Europe. We expect to record in the aggregate approximately $87 million to $94 million in pre-tax restructuring charges. Included in these charges are (i) approximately $17 million to $19 million primarily related to the consolidation of leased facilities and (ii) approximately $70 million to $75 million related to employee severance arrangements. We expect to record approximately $73 million to $78 million of these charges in the fiscal quarter ending Dec. 2, 2011.
See separate release issued today for more information regarding the company’s strategy and goals with its business realignment.
Adobe Reaffirms Fourth Quarter FY2011 Revenue Target Range
With approximately four weeks remaining in the quarter, the company believes it will achieve fourth quarter revenue within the $1.075 billion to $1.125 billion range it previously provided on Sept. 20, 2011.
“We expect to report record revenue within the fourth quarter target range we previously issued,” said Mark Garrett, executive vice president and CFO of Adobe.
Based on the impact of the restructuring charge discussed above that the company expects to take in the fourth quarter, Adobe updated its targeted GAAP diluted earnings per share range to be $0.30 to $0.38 in the quarter. The company had previously targeted a fourth quarter diluted earnings per share range of $0.41 to $0.50 on a GAAP basis.
Adobe continues to target a diluted earnings per share range of $0.57 to $0.64 on a non-GAAP basis in the fourth quarter. A reconciliation between the company’s GAAP and non-GAAP financial targets is provided at the end of this press release.
Adobe plans to report its fourth quarter results on Dec. 15, 2011 after the market closes.