Shares of Adobe Systems Inc. soared today following the company's better-than-expected first-quarter earnings report.
In midmorning trading, the company's stock rose $4.13 to $39. Adobe reported a 38 percent gain in net income to $44 million for the quarter ended Feb. 28. The software maker, which announced its quarterly results Tuesday afternoon following the close of the stock market, said sales increased 17 percent to $226 million.
Adobe, based in San Jose, Calif., derived the majority of its sales from application revenues. The company's retail sales were split evenly between Windows and Macintosh products, although the Mac platform made up almost 70 percent of the upgrade sales.
"We are pleased with the solid results achieved in this quarter," CEO John Warnock, said in a release. "It reflects the broad and growing acceptance of our products on both Windows and Macintosh platforms in both traditional markets and emerging markets such as Internet and intranet communications and Web site design and content creation."
At the same time, the company announced an unusual plan to issue dividends based on its investments in technology startups. The dividends will be in the form of shares of the companies in which Adobe has invested.
The company said the plan will help it "gain key insights into emerging technologies and markets that can affect Adobe's strategic position in the software business," as well as invest in companies that develop extensions to its own software.
Currently, Adobe has invested a total of $60.1 million in 23 companies, including Netscape Communications Corp., PointCast Inc. and Verity Inc.