Analyst Predicts Adobe Slowdown

Adobe has posted one earnings surprise after another in recent months, leading to a 30% gain for the company’s stock since March.

But one analyst thinks the run may be about over.

CS First Boston downgraded Adobe to Neutral on Wednesday on the belief that the company’s results will come in below expectations in the second half of the year because of seasonal softness and product uncertainty. CSFB said it expects third-quarter earnings of 29 cents, below analysts’ 32-cent estimates.

But CSFB expects second-quarter results to come in fine when Adobe reports tomorrow night. Analysts expect Adobe to earn 42 cents a share, up from 28 cents a year ago.

Red Hat , which bounced back 3% Wednesday from a 9% drop on the resignation of its CEO, also reports earnings tomorrow night. Analysts expect earnings of 4 cents a share, up from a penny a year ago.

Stocks were flat Wednesday ahead of wholesale inflation data due out Thursday morning.

The Nasdaq added 2 to 1998, the S&P 500 climbed 1 to 1133, and the Dow was unchanged at 10,379. Volume declined to 1.17 billion shares on the NYSE, and 1.36 billion on the Nasdaq. Advancers led 17-15 on the NYSE, and 16-14 on the Nasdaq. Upside volume was 56% on the NYSE, and 47% on the Nasdaq. New highs-new lows were 96-40 on the NYSE, and 67-37 on the Nasdaq.

After the close, Jabil fell on a warning.

During the day, Oracle fell 3% despite beating estimates, as traders focused instead on weak application results.

Broadcom and Motorola gained on acquisitions.

Sprint lost 2.5% on job cuts.

Aware soared 15% on a deal with Atmel .

Vcampus jumped 12% on an e-learning deal with the Association for Financial Professionals.

Teleglobe plunged 28% after reporting a loss and drop in revenue.

Corning declined 2% on trade problems with China.

Akamai lost 1% on an outage.

Apple surged 7% to a three-year high.

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