Adobe forecasts FY18 profit above estimates, shares surge

(Reuters) - Photoshop maker Adobe Systems Inc forecast better-than-expected revenue and profit for fiscal 2018 due to growth in its cloud business, sending its shares up 8 percent in extended trading. The company said on Wednesday it expects revenue of $8.7 billion and profit of around $5.50 per share for fiscal 2018. Analysts were expecting revenue of $8.68 billion and profit of $5.21 per share, according to Thomson Reuters I/B/E/S. The shift to a cloud-based subscription has brought a more predictable revenue stream for Adobe, by selling its software through web-based subscriptions, and not through the sale of packaged-licensed software. Adobe said it expects revenue from its digital media unit, which includes Creative Cloud, to be up 23 percent from a year earlier. The company also said it expects experience cloud bookings, a set of cloud services part of its digital marketing unit, to be up 20 percent from a year earlier. Adobe said it is on track to achieve its current-quarter revenue and profit forecast. The company expected an adjusted profit of $1.15 per share and revenue of $1.95 billion for the fourth quarter. Analysts were expecting earnings of $1.16 per share and revenue of $1.95 billion, according to Thomson Reuters I/B/E/S. Adobe shares were up 8.1 percent at $165.40. Up to Wednesday's close the stocks had risen 48.6 percent since the beginning of the year. (Reporting by Laharee Chatterjee; Editing by Sriraj Kalluvila and Shounak Dasgupta)