Adobe Inc.

J.P. MORGAN CHASE & CO., $22.85, New York symbol JPM, has cut its quarterly dividend by 86.8%, to $0.05 a share from $0.38. The new annual rate of $0.20 yields 0.9%. The lower dividend should save Morgan $5 billion a year, and help it cope with higher loan losses brought on by the recession. The company earned $3.7 billion, or $0.84 a share, in 2008. It also received $25 billion from the U.S. government through the Troubled Asset Relief Program. Meanwhile, Morgan expects to report a profit for the first quarter of 2009. That’s despite $1 billion to $1.4 billion in projected losses from home-equity loans. Morgan made these loans to high-quality borrowers, but because home prices have fallen so much, they now owe more that the current market value of their homes. Morgan also expects more losses from its credit-card loans. However, by cutting jobs at Washington Mutual, which Morgan bought in September 2008, it should save $2 billion this year. In light of its weaker loan portfolio, we’ve cut Morgan’s WSSF Quality Rating from Above Average to Average. However, the company is still in a strong position to survive the economic slowdown, and thrive when the economy starts growing again....

NISSAN MOTOR CO., $6.44, symbol NSANY on Nasdaq, plans to shift production of its Nissan March compact car to India, Thailand and other lower-cost countries in 2010. Nissan currently builds 47,000 of these cars a year at its Oppama plant, near Tokyo. Moving this production to Thailand would cut costs by 30%. Nissan also plans to move production of other compact cars currently being built in the U.K. to India. The weak U.S. dollar has hurt Nissan and other Japanese automakers by reducing the value of overseas sales when they are converted into yen. Conversely, the yen’s strength makes investments in plants in emerging markets even more cost-effective. The U.S. dollar is at a 13-year low against the yen, and is trading at around 90 yen to one dollar. In response to slumping global demand, Nissan will reduce its domestic production by 64,000 vehicles in February and March of 2009. These cuts raise the total number of vehicles eliminated in the current fiscal year, ending March 31, 2009, to 225,000, or 16.3% of the 1.38 million vehicles Nissan originally expected to produce....

ADOBE SYSTEMS INC. $22.13, symbol ADBE on Nasdaq, rose as high as $24 this week after reporting record earnings in the latest quarter. Excluding one-time items, earnings per share in the three months ended November 28, 2008 rose 22.4%, to $0.60 from $0.49 a year earlier. Revenues rose 0.5%, to $915.3 million from $911.2 million. In the latest quarter, slower than anticipated sales of Adobe’s new Creative Suite 4 software dampened sales. The stronger U.S. dollar also hurt Adobe’s revenues. The company now gets more than half of its revenues from outside the U.S., so a higher dollar lowers the contribution of foreign sales. In response to slower sales expected in 2009, Adobe will now cut 600 jobs (8% of its workforce) and reduce expenses such as travel costs. Adobe holds cash of $2 billion or $3.82 a share. Long-term debt of $350 million is a low 3% of its market cap of $11.5 billion. That gives the company plenty of room to finance new product development and to make small acquisitions. Adobe spends a high 16.7% of sales on research and development. The stock now trades at 12.6 times next year’s forecast earnings of $1.75 a share....

GENERAL ELECTRIC CO. $17.85, New York symbol GE, moved up this week after the company said it would further scale back the activities of its struggling finance division. GE Capital now accounts for about 50% of GE’s total earnings. Through sales of certain financing businesses, the company now aims to reduce GE Capital’s earnings contribution to 30% by the end of 2009. GE now feels it will earn $0.50 to $0.52 a share in the fourth quarter of 2008. That’s down from its earlier forecast of $0.50 to $0.65 a share. These figures exclude restructuring and other charges of up to $1.4 billion. Even with these charges, GE will still earn over $18 billion in 2008. The company also plans to keep paying its $1.24 dividend (6.9% yield) in 2009. GE is a buy....

ADOBE SYSTEMS INC. $23 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 531.0 million; Market cap: $12.2 billion; WSSF Rating: Average) makes software that lets computer users easily create, edit and share electronic documents in the popular PDF format. It also makes software that graphic designers use to create print publications and web pages. Excluding one-time items, Adobe’s earnings per share in its third fiscal quarter ended August 29, 2008 rose 11.1%, to $0.50 from $0.45 a year earlier. Revenues grew 4.2%, to $887.3 million from $851.7 million. The company spent $170.1 million (19.2% of revenue) on research in the latest quarter, up 4.2% from $163.2 million (19.2% of revenue) in the year earlier quarter. In October, 2008, Adobe launched its new Creative Suite 4 software program. This new version makes it easier for users to design web sites that include features such as animation and live video. Due to the growth of the Internet over the past few years, Creative Suite now accounts for over 55% of Adobe’s total revenues....

Many technology stocks have plunged 50% or so in the past three months. That’s due to fears that the slowing economy will prompt businesses and consumers to buy fewer computers and cellphones. We feel proven tech leaders, such as these six, have a lot of appeal. They all have plenty of cash for research, and little debt. New products from this research will give them a competitive advantage, and spur their sales as the economy rebounds. As well, all six now trade for about 10 times earnings, down from 30 to 40 times a few years ago. Their p/e’s should eventually creep up, as their research spending pays off. That could lead to big gains for patient investors. But only some are buys right now....

ADOBE SYSTEMS $25.94 (Nasdaq symbol ADBE; SI Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 531.0 million; Market cap: $13.8 billion) reported earnings in the latest quarter that exceeded consensus expectations. Excluding one-time items, earnings per share in the three months ended August 29, 2008 rose 11.1%, to $0.50 from $0.45 a year earlier. That beat expectations of $0.46 a share. Revenues rose 4.2%, to $887.3 million from $851.7 million. In the latest quarter, stronger sales of established products such as Acrobat, Flash and Photoshop software boosted Adobe’s revenues and earnings. However, sales of its Creative Suite 3 software fell 10%, as customers delayed purchases to wait for the launch of the new Creative Suite 4. That upgrade will be available in the fourth quarter of 2008. Adobe holds cash of $2 billion or $3.77 a share. Long-term debt of $350 million is a low 2.5% of its market cap of $13.8 billion. That gives the company plenty of room to finance new product development. The company spends a high 19% of sales on research and development....

The Dow’s 11.1% gain on Monday was the fifth-biggest percentage gain on record. The 9.8% gain on Toronto the next day was the biggest ever. Markets remain volatile and have moved down since, but my view is that governments around the world are now taking the kind of steps that will contain the crisis and eventually restore liquidity in the banking system. You can only spot market reversals in hindsight, so it’s too early to declare if we are near a bottom. But even if we are, markets are apt to remain volatile and some stocks are bound to go to lower lows....

ADOBE SYSTEMS INC. $39 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; 530.4 million; Market cap: $20.7 billion; WSSF Rating: Average) earned $0.50 a share in its third fiscal quarter ended August 29, 2008, up 11.1% from $0.45 a year earlier. These figures exclude one-time items. The latest earnings also beat the consensus forecast of $0.46 a share. Revenues rose 4.2%, to $887.3 million from $851.7 million. In the latest quarter, stronger sales of established products such as Acrobat, Flash and Photoshop software boosted Adobe’s revenues and earnings. However, sales of its Creative Suite 3 software fell 10%, as customers delayed purchases to wait for the launch of the new Creative Suite 4. That upgrade will be available in the fourth quarter of 2008. Adobe holds cash of $2 billion or $3.77 a share. Long-term debt of $350 million is a low 1.7% of its market cap. That gives the company plenty of room to finance new product development....

Some investors worry that Washington’s $700 billion bailout of the banking industry is going to fall apart, and that this will lead to a rise in gold and a drop in the stock market. We think the bailout will go through. The only obstacle to it is the political bickering and posturing that is bound to go into a highly visible effort like this, all the more so just prior to a presidential election. There is always a possibility that the market will move lower from here. Meanwhile, gold will stay volatile. But we still feel stock prices will hit bottom over the next month or two, then move up for six months or more. GABRIEL RESOURCES, $2.06, symbol GBU on Toronto, now believes that the upcoming November elections in Romania will result in a positive political decision on the future of its 80%-owned Rosia Montana gold project in Romania....