Adobe Inc.

ALARMFORCE INDUSTRIES, $5.40, symbol AF on Toronto, reports that it earned $1.4 million, or $0.12 a share, in the three months ended July 31, 2009. That’s up 156.5% from $553,926, or $0.05 a share, a year earlier. The home-security firm’s cash flow per share jumped 54.5%, to $0.17 from $0.11. Revenue rose 12.5%, to $8.5 million from $7.6 million. AlarmForce mainly attracts new customers by aggressively promoting itself through radio and TV advertising. In the U.S., subscriptions jumped 54.4%, to 12,200 from 7,900 a year earlier. Canadian subscriptions rose 8.7%, to 86,500 from 79,600. In all, the company had 98,700 subscribers at the end of the most recent quarter, up 12.8% from 87,500 a year earlier. Demand for security systems remains steady, and AlarmForce’s balance sheet is strong. These factors will let the company continue to profit from the economic recovery. Moreover, AlarmForce’s $929,168 long-term debt is just 1.4% of its market cap. It holds cash of $6.6 million, or $0.54 a share....

SYMANTEC CORP. $15.22 (Nasdaq symbol SYMC; SI Rating: Average) (1-408-517-8000; www.symantec.com; Shares outstanding: 814.5 million; Market cap: $12.4 billion) makes software that protects computers from viruses and electronic attacks. The popular Norton anti-virus program is its best-known product. In the three months ended July 3, 2009, Symantec earned $73 million, or $0.09 a share. That’s down 57.6% from $172 million, or $0.20 a share, a year earlier. If you exclude unusual items, including writedowns of securities and gains on the sale of assets, per-share earnings fell 15.0%, to $0.34 from $0.40. That fell just short of the $0.35 a share that analysts were expecting. As well, the company continues to spend around 15% of its revenue on research, so it’s more profitable than it looks. Revenue fell 13.2%, to $1.43 billion from $1.65 billion. Analysts were expecting $1.49 billion. The recession has prompted businesses to put off investments in computer software and storage products. However, Symantec was able to partly offset this by launching several new consumer products during the quarter. These helped it sell more of its Norton antivirus and Internet-protection software to individuals....

ADOBE SYSTEMS INC. $31.34 (Nasdaq symbol ADBE; SI Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 525 million; Market cap: $16.5 billion) recently shut down its North American operations for a week as part of a previously announced cost-cutting plan. The closure was the second of three one-week shutdowns that Adobe plans to implement this year. These are in addition to the company’s usual shutdown for the week between Christmas and New Year’s Day. Employees are being asked to use their paid vacation during the shutdowns. Adobe hasn’t said how much it expects to save during the shutdowns. But the company’s revenue fell 20.5% in the three months ended May 29, 2009, to $704.7 million from $886.9 million. Newspapers and magazines, many of which are Adobe’s main clients, are selling fewer ads because of the recession. This has hurt demand for Abode’s Creative Suite 4 graphic-design software, which accounts for about 60% of the company’s sales. The shutdowns should help lift Adobe’s profits, despite the lower sales....

DOREL INDUSTRIES, $26.79, symbol DII.B on Toronto, has introduced its patented Air Protect system to protect children in car seats during side-impact collisions. The system works by putting a layer of air protection around the child’s head. Air Protect inflates a cushion which then slowly loses air to absorb the energy that can cause head trauma. It will be launched as part of the company’s new Safety 1st Complete Air Car Seat. Head trauma causes the vast majority of fatalities in side-impact crashes, according to the U.S. National Highway Traffic Safety Administration. Dorel believes that it will sell hundreds of thousands of the Air Protect car seats, whose technology will eventually be added to other seat designs, including lower-cost options. As well, the U.S. government is looking at requiring safer car seats in order to protect infants from side-impact crashes....

FEDEX CORP., $51.45, New York symbol FDX, fell 3% this week, despite reporting better-than-expected earnings. In the fiscal year ended May 31, 2009, FedEx’s earnings fell 91.3%, to $98 million, or $0.31 a share. The company earned $1.1 billion, or $3.60 a share, in the prior year. The drop was largely caused by a $1.2-billion writedown of goodwill related to its 2004 purchase of Kinko’s Inc. (now called FedEx Office), a chain of stores that sell printing and copying services. Accounting rules force companies to write down goodwill if the underlying assets are no longer worth what the company originally paid for them. So far, FedEx has written off about 70% of the $2.4 billion it paid for Kinko’s. The charge also included a goodwill writedown related to a 2006 purchase of a regional trucking firm. Without these charges, earnings per share fell a more modest 35.5%, to $3.76 from $5.83. Still, that beat the $3.66 a share that analysts were expecting....

AEROPOSTALE INC., $35.02, symbol ARO on New York, opened the first of its new kids’ stores, “P.S. from Aeropostale,” on Thursday. The store is in the Palisades Mall in West Nyack, New York, just north of New York City. Aeropostale plans to open about nine more stores, mostly in the New York metropolitan area, this year. It also will launch an e-commerce site, www.ps4u.com. P.S. from Aeropostale is aimed at seven-to-12-year-old elementary-school students. The company’s more than 900 Aeropostale stores mainly target 14- to 17-year-old women and men. Both chains offer active-oriented clothing that has a reputation for high quality and low prices. The company will price comparable items at P.S. from Aeropostale about 10% to 15% below those at its main Aeropostale stores....

ADOBE SYSTEMS INC. $22 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.2 million; Market cap: $11.5 billion; Price-to-sales ratio: 3.4; WSSF Rating: Average) is down from its August 2008 level of $46. This is partly because the recession has prompted users to postpone upgrading their Adobe software. Adobe plans to take advantage of the slump by acquiring other software companies, probably at bargain prices. It’s particularly interested in smaller companies that specialize in software for cellphones. This would let Adobe take advantage of growing consumer demand for downloadable video and music files. Adobe holds cash of $2.4 billion, or $4.47 a share. Its long-term debt is just $350 million, so it can easily afford to expand. Adobe is a buy.

ADOBE SYSTEMS INC. $21.35 (Nasdaq symbol ADBE; SI Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 524.2 million; Market cap: $11.2 billion) makes software that lets computer users easily create, edit and share documents in the popular PDF format. Graphic designers also use Adobe’s software to create print publications and web pages. In the three months ended February 27, 2009, Adobe’s revenue fell 11.7%, to $786.4 million from $890.4 million. Earnings per share, excluding one-time items, fell 6.3%, to $0.45 from $0.48. In the quarter ending May 31, 2009, Adobe expects to report earnings per share of between $0.31 and $0.38 on revenue of about $700 million....

ALIMENTATION COUCHE-TARD, $12.15, symbol ATD.B on Toronto, reported strong earnings in the latest quarter due to stronger-than-expected same-store sales (excluding fuel). In Canada, they rose 4.7% and in the United States 0.5%. This helped offset a 6.2% drop in the volume of U.S. gas sold. Couche-Tard’s American customers, in particular, are cutting back on their driving because of the recession. Couche-Tard has more than 3,000 convenience stores in the U.S., and is the largest convenience-store operator in Canada, with over 2,000 outlets. The Canadian stores operate under the Couche-Tard and Mac’s banners, while the U.S. stores mainly use the Circle K banner. Couche-Tard sells fuel at 65% of its 4,000 company-operated stores. In the three months ended February 1, 2009, Couche-Tard’s earnings rose 40.8%, to $71.1 million from $50.5 million a year earlier. (All figures except share price in U.S. dollars.) Earnings per share rose 48%, to $0.37 from $0.25 on 4.4% fewer shares outstanding. Lower gas prices in the U.S. and Canada drove down revenue by 14.8%, to $3.9 billion from $4.6 billion....

INTERNATIONAL BUSINESS MACHINES CORP., $92.51, New York symbol IBM, is in talks to buy computer-hardware maker Sun Microsystems Inc. (Nasdaq symbol JAVA). The rumoured $6.5-billion price is roughly double Sun’s market cap before the news became public. This would be a big purchase for IBM, which earned $12.3 billion, or $8.93 a share, in 2008. Sun’s appeal justifies the high price, and it’s a good fit with IBM. Both IBM and Sun make computer servers for governments and big corporations, so IBM would cut its costs and increase its market share by purchasing Sun. (IBM has about 30% of the server market, and Sun would push this up to 40%.) The move would also help IBM compete with Cisco Systems Inc., which plans to enter the server business. In addition, Sun’s software expertise and its widely used Java programming language would enhance IBM’s web-based services....