Adobe Systems (ADBE) Shares Soar on Higher 1Q Earnings
Shares of Adobe Systems (ADBE) were trading up +6.04 or +6.71 percent to $96.00 per share in Friday’s premarket after the company announced first quarter earnings that beat analyst expectations yesterday after the market close. Adobe stock closed at $89.96, up +1.79 or +2.03 percent in Thursday’s regular trading session.
San Jose, California based Adobe Systems is one of the world’s largest software companies and has been at the forefront of computer software application development and marketing since its founding in 1982.
For Adobe’s first fiscal quarter of 2016 ended on March 4th, the company reported diluted GAAP earnings of $0.50, with non-GAAP earnings per share of $0.66, an increase of +50 percent over last year’s first quarter. Revenue came to $1.38 billion, an increase of +25 percent over the same period one year ago. Analysts were expecting earnings per share of $0.61 on revenue of $1.34 billion.
In the company’s press release, Adobe Chief Executive Officer Shantanu Narayen noted that, “Every day, more brands, government agencies and educational institutions globally are choosing to base their digital strategies on Adobe’s content and data platforms. Our exceptional performance in Q1 is an indicator of the strong momentum we are seeing across our cloud businesses as we drive the experience economy.”
The strong increase in Adobe’s first quarter earnings was in large part due to its Digital Media, Creative Cloud and Marketing Cloud segments. Digital Media grew by +33 percent year over year to $932 million, while Creative revenue came to $733 million, an increase of +44 percent year over year.
Adobe Marketing Cloud showed strong bookings growth, in addition to record revenue of $377 million, which showed a year on year growth rate of +21 percent. The company’s Creative Cloud adoption drove its Digital Media Annualized Recurring Revenue to $3.13 billion, up +$246 million.
Net income increased +200 percent year over year on a GAAP basis, while operating income grew +78 percent. The company bought back 1.5 million of its shares in the quarter, returning $133 million back to stockholders.
For Adobe’s second quarter, the company is looking for adjusted earnings per share of $0.64 to $0.70, roughly a +35 to +45 percent increase over last year’s second quarter. The analyst consensus was for guidance of $0.65 for the quarter. Adobe stock is trading just under its yearly high of $96.42 in this morning’s premarket, showing investor’s bullish sentiment after having traded as high as $97 per share in yesterday’s aftermarket.
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Adobe Uses Vast Digital Data for More Accurate Analysis of U.S. Economy
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Adobe Named a Leader in IDC MarketScape: Worldwide Marketing Cloud Platforms 2016
Adobe was invited to participate in an independent report assessing the capability and strategy of nine leading marketing cloud platforms.
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