Adobe (ADBE) Higher on Earnings News
Shares of the Adobe Systems (ADBE) were up +6 percent to $43.10 per share in afterhours trading on Tuesday, after the company announced a -65 percent decline in quarterly earnings. The decline in earnings was attributed to lower revenues and higher operating expenses, but the results were better than expected by analysts. Adobe stock closed at $40.75, down -0.31 or -0.75 percent in Tuesday's regular trading session.
Also in the news was an 8-K filing with the Securities Exchange Commission announcing the resignation of Kevin Lynch, Adobe's Executive Vice President Chief Technology Officer, and effective March 22, 2013. The filing stated Lynch was resigning to "pursue other opportunities." Lynch will be going to work for Apple Inc. (AAPL
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San Jose, California based Adobe Systems has been at the forefront of computer software application development and marketing since its founding in 1982. The company has a large array of products including desktop and server software, internet web design programs, document and video formats and web content management software. Adobe announced fiscal first quarter earnings of $65.12 million, or $0.13 per share, versus $185.21 million or $0.37 per share in the same period one year ago. Adjusted earnings per share were $0.35 per share versus $0.57 per share in Q1 2012. Analysts were expecting a profit of $0.31 per share. Revenue was also lower by almost 4 percent to $1.008 billion, analysts were expecting revenue of $986 million, while Adobe's guidance for the quarter was $985-$1 billion. The company had lower product revenue, while being offset by its growing subscription business as the company continues moving towards a subscription model in Digital Media. Product revenue came in at $675.8 million, versus $808.5 million one year ago. Subscription revenue increased to $224. 3 million, versus $146.2 million in 2012's first quarter. Adobe's Service and Support units also saw revenue grow from $90.5 million to $107.8 million. The company added a total of 159,000 paid subscribers to its Creative Cloud service in the first quarter. CEO and President Shantanu Narayen, stated that, "Creative Cloud is quickly becoming mainstream, with the overwhelming majority of Creative purchases on Adobe.com now being Creative Cloud subscriptions," he continued, "With AdobeMarketing Cloud, we are the partner of choice for Chief Marketing Officers as we help our customers migrate their businesses online." In a conference call with analysts after the earnings announcement, Narayen affirmed that "In Digital Media, we're redefining the creative process with Creative Cloud. We drove strong Creative Cloud adoption in Q1. We exited the quarter with 479,000 paid subscriptions, and recently, we crossed the 0.5 million mark. With this momentum, we are on track to reach our goal of 1.25 million paid subscriptions by the end of this fiscal year." Narayen told CNBC Adobe forecasts second quarter revenue between $975-1.03 billion, with earnings per share in the $0.29-$0.35 range. Analysts were estimating $0.34 per share on revenue of $1.02 billion. For fiscal 2013, Narayen estimated revenue of $4.1 billion with earnings per share of $1.45, versus the street consensus of $1.40 and $4.1 billion. Other News About ADBE Adobe Creative Cloud Subscriptions Surpass Half-Million Mark
Adobe's subscription services continue to grow. Adobe CTO Kevin Lynch Resigns to Work at Apple
Adobe CTO Lynch moving to Apple. Other Stocks in the News General Electric Not Pursuing GE Capital Spin Off
Company states it will not spin off unit, but does not rule it out. BlackBerry Inventor Starts Fund to Make Star Trek Device Reality
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Published on Mar 20, 2013
By Jay Hawk