Adobe's first quarter profit was down on the costs of its merger with Macromedia, though revenue reached a new record, the company revealed.

In the first quarter of fiscal 2006, Adobe achieved record revenue of $655.5 million, compared to $472.9 million in Q1 2005 fiscal quarter and $510.4 million in Q4 fiscal 2005.

Year-on-year that's 39 per cent revenue growth. Adobe was aiming at between $630 to $660 million for the quarter.

However, GAAP net income fell 31 per cent.

Adobe accrued $105.1 million for the first quarter of fiscal 2006, compared to $151.9 million in Q1 2005, and $156.3 million in Q4 2005.

"Adobe's business continues to perform well, driven by strong demand for our creative solutions and Acrobat," said Adobe CEO Bruce Chizen.

"In addition to our strong financial results, we are making rapid progress integrating the Macromedia business and remain excited about our prospects for future growth."

A variety of merger-related costs kicked in during the quarter, including restructuring charges related to the Macromedia acquisition, a charge for incomplete technology related to a small acquisition, stock-based compensation, the net tax impact of the repatriation of certain foreign earnings, tax differences due to the timing and deductibility of the Macromedia acquisition-related charges and investment gains and losses.

For the second quarter of fiscal 2006, Adobe is targeting revenue of $640 million to $670 million and an operating margin of approximately 22 to 24 per cent.

For fiscal year 2006, Adobe reaffirmed its annual revenue target of approximately $2.7 billion.