(Bloomberg) -- Adobe Systems Inc. forecast revenue in the current quarter that may miss analysts’ estimates, signaling slowing momentum for its cloud-based products.

Key Points

Fiscal second-quarter revenue climbed 20 percent to $1.4 billion, the company said Tuesday in a statement. The sales met analysts’ estimates. Profit excluding certain items was 71 cents a share in the period ended June 3. Analysts on average projected profit of 68 cents. The company forecast sales in the fiscal third quarter of $1.42 billion to $1.47 billion and adjusted earnings of 69 cents to 75 cents per share. That compares with estimates of $1.47 billion and 71 cents, respectively. Shares declined as much as 5.3 percent in extended trading after the earnings were released.
The Big Picture

Chief Executive Officer Shantanu Narayen is investing in products delivered over the internet for Adobe’s corporate customers who need high-powered software for tasks from editing video to analyzing digital marketing efforts.

The Detail

Second-quarter net income increased to $244.1 million, or 48 cents a share, from $147.5 million, or 29 cents, a year earlier. Marketing Cloud revenue gained 18 percent in the quarter to $385 million. Adobe forecasts 20 percent growth for the fiscal year. Digital Media annualized recurring revenue was $3.41 billion at the end of the quarter and is forecast to reach about $4 billion by the end of the fiscal year. Operating expenses increased 8.8 percent to $852 million.

The CFO Interview

“You have typical seasonality in Q3 and that’s what you’re seeing in the guidance that we provided,” Chief Financial Officer Mark Garrett said in an interview. “The key is how are we going to see the rest of the year -- and that’s playing out exactly as we thought.” “The valuations were crazy a little while ago, and I think they’ve come back down to something more reasonable, and that’s why you’re seeing more M&A,” he said. “We feel very good about the year, and we feel very good about how we’re positioned for FY17,” he said.