Adobe Systems Earnings: Beats Estimates Despite Fourth Straight Quarter of Dropping Profits

S&P 500 (NYSE:SPY) component Adobe Systems Incorporated (NASDAQ:ADBE) reported its results for the first quarter. Adobe Systems offers a line of creative, business, web, and mobile software and services used by creative professionals, knowledge workers, consumers, original equipment manufacturers, developers, and enterprises.

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Adobe Systems Incorporated Earnings Cheat Sheet for the First Quarter

Results: Net income for Adobe Systems Incorporated fell to $185.2 million (37 cents per share) vs. $234.6 million (46 cents per share) a year earlier. This is a decline of 21.1% from the year-earlier quarter.

Revenue: Rose 1.7% to $1.05 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Adobe Systems Incorporated reported adjusted net income of 57 cents per share. By that measure, the company beat the mean estimate of 46 cents per share. Analysts were expecting revenue of $1.05 billion.

Quoting Management: Our strategy is to be the leader in Digital Media and Digital Marketing. With the upcoming release of our Creative Suite and Creative Cloud offerings, and with the momentum we have in Digital Marketing, we remain confident about our ability to drive strong revenue and earnings growth,” said Shantanu Narayen, president and chief executive officer, Adobe.

Key Stats:

Revenue has risen for the last four quarters. Revenue increased 14.3% to $1.15 billion in the fourth quarter of the last fiscal year. The figure rose 2.3% in the third quarter of the last fiscal year from the year earlier and climbed 8.5% in the second quarter of the last fiscal year from the year-ago quarter.

The company’s net income has fallen for the last three quarters. In the fourth quarter of the last fiscal year, net income fell 35.4% from the year earlier, while the figure fell 15.2% in the third quarter of the last fiscal year.

The company has now beaten estimates the last two quarters. In the fourth quarter of the last fiscal year, it topped expectations with net income of 52 cents versus a mean estimate of net income of 50 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 50 cents a share to 48 cents over the last ninety days. The average estimate for the fiscal year is $1.98 per share, down from $2 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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