4 September 2002

By Kurt Foss, Planet PDF Editor

In a broker note posted today on CNet's Brokerage Center, analyst C. Eugene Munster of US Bancorp Piper Jaffray advised investors "continue to be cautious in the near-term given the lack of catalysts and a loss of momentum in Photoshop and Acrobat," adding that "we expect the next version of Acrobat to ship in February or March of 2003." Munster noted that Adobe Systems has made no formal announcement of such a future product, but the projection is very much in line with the product's release history. Acrobat 5.0 shipped in the same general timeframe in 2001.

During most of the rest of the year, Acrobat sales set new records for the company's ePaper Solutions group during successive financial quarters, even surprising many analysts participating in Adobe's quarterly report conference calls with its continued greater-than-40 percent growth as late as Q3 2001 -- until the worsening worldwide economy and the impact of September 2001's terrorist attacks intervened. Since then, Adobe has reported Acrobat sales as "stagnant." While the economic downturn is considered the major cause, it's also considered significant that Acrobat 5.0 is nearing the end of its cycle. Only a new version will reinvigorate significant sales.

Anticipating a new version early in 2003, Munster issued the following "keypoint" advice to potential investors:

"Buying shares of ADBE three to four months before the Acrobat upgrade ships, and selling one month after shipment has historically produced returns of 32 percent. For the upcoming Acrobat cycle, this translates into adding to shares in the November timeframe. Acrobat 5.0 data has been excluded to account for a meaningful earnings disappointment in the months prior to its release."

Accordingly, he adds that "in the fall timeframe we expect to see increased interest in ADBE shares surrounding the anticipation of Acrobat."

Adobe's current rating with U.S. Bancorp Piper Jaffray:

• Rating: Market Perform*
• Volatility: High*

Adobe plans to report its third quarter fiscal 2002 results on September 12, 2002 after the market closes.

To Top

MORE INFO

• U.S. Bancorp Piper Jaffray (www.pjc.com)

• US Bancorp Piper Jaffray reports for 9/4/02

• Acrobat sales "essentially flat" in Q2, PDF authoring tool pilot underway - Planet PDF, June 2002

• Terrorist aftershock wobbles Adobe revenues, forces layoffs - Planet PDF, October 2001

• Acrobat only bright spot in Adobe's Q3 Earnings Report - Planet PDF, September 2001

• Fiscally fit Adobe bullish on 2001 growth prospects - Planet PDF, December 2000

• Adobe Systems - Investor Relations

• Planet PDF Forum (forum.planetpdf.com)