Adobe announces record revenues for Q1 11

Adobe’s first quarter financial results have shown another period of growth, but it is lowering expectations for the following quarter because of the tragedy in Japan.

Adobe showed improvement from the preceding quarter, reaching record revenues of $1.028 billion in the first quarter of 2011 (Q1’11), up slightly from $1.008 billion at the end of 2010.

The record results were also a significant improvement on the first quarter results in 2010, which reached $858.7 million, representing a 20 percent year on year revenue growth.

By surpassing the expected target revenue range of between $1 billion and $1.5 billion, Adobe enjoyed its sixth consecutive quarter of financial growth.

However the firm decided that it would reduce its expectations for the Q2’11 due to the tragic disaster in Japan, a country which Adobe has close links with.

“Our hearts go out to everyone in Japan,” said Mark Garrett, executive vice president and CFO of Adobe.

“Although Adobe has a very diversified business, Japan is our second largest country from a revenue perspective and March is typically our biggest revenue month of the year there due to fiscal year-end spending.”

Due to the uncertain business environment in Japan, revenue targets have been reduced in the second quarter by $50 million, roughly one third of original expectations for Japan.

All in all, Adobe is now expecting revenue between $970 million and $1.02 billion during the coming quarter.

The operating margin is expected to be 24.5 percent to 27.5 percent on a GAAP basis, and 34 percent to 36 percent on a non-GAAP basis.

The firm’s GAAP diluted earnings during the first quarter were $0.46 per share based 511.3 million weighted average shares, a jump from $0.24 based on 532.6 million in the corresponding quarter of 2010.

GAAP operating income rose in the first quarter from  $176.8 million the previous year to $302.2 million in the first quarter of 2011, while the preceding quarter say an operating income of $286.9 million.

As a percent of revenue this meant Q1’11 operating income was 29 percent, as compared to 20.6 percent in Q1’10 and 28.5 percent in Q4’10.

GAAP net income meanwhile was $234.6 million for the Q1’11, up from $127.2 million in Q1’10 and a downturn from £268.9 million in Q4’10.

Non-GAAP diluted earnings per share in Q1’10 were $0.58, compared to $0.40 in Q1’10 and $0.56 in Q4’10.

Meanwhile non-GAAP operating income was $400.1 million in the Q1’11, up from $289.3 million in Q1’10 and $384.0 million in Q4’10.

In percentage terms this meant 38.9 percent in Q1’10, compared to 33.7 percent in Q1’10 and 38.1 percent in Q4’10. Non-GAAP net income was $298.1 million for Q1’11, up from $211.7 million in the first quarter of 2010 and $285.7 million in the final quarter.