Adobe Systems Earnings: Beats the Street on Profit Rise

S&P 500 (NYSE:SPY) component Adobe Systems Incorporated (NASDAQ:ADBE) reported net income above Wall Street’s expectations for the fourth 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

Results: Net income for Adobe Systems Incorporated rose to $222.3 million (44 cents per share) vs. $173.7 million (35 cents per share) in the same quarter a year earlier. This marks a rise of 28% from the year-earlier quarter.

Revenue: Rose 0.1% to $1.15 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Adobe Systems Incorporated reported adjusted net income of 61 cents per share. By that measure, the company beat the mean estimate of 46 cents per share. It beat the average revenue estimate of $1.11 billion.

Quoting Management: “We beat our Creative Cloud subscription goals and established Adobe Marketing Cloud as the leader in the exploding category of Digital Marketing during fiscal 2012,” said Shantanu Narayen, president and chief executive officer, Adobe. “In fiscal 2013 we intend to accelerate our pace of innovation, and drive integration between Creative Cloud and Adobe Marketing Cloud.””We’re driving migration to a subscription model in our Creative business faster than we predicted a year ago, and we are confident fiscal 2013 will be the pivotal year for the transition,” said Mark Garrett, executive vice president and chief financial officer, Adobe. “This will yield a stronger, more predictable recurring revenue model with higher long-term revenue growth.”

Key Stats:

Revenue has risen for the last four quarters. Revenue increased 6.6% to $1.08 billion in the third quarter. The figure rose 9.9% in the second quarter from the year earlier and climbed 1.7% in the first quarter from the year-ago quarter.

The company beat estimates last quarter after falling short in the previous two quarters. In the third quarter, it missed the mark by 3 cents, and in the second quarter, it came in under estimates by 2 cents.

Net income has dropped 5.5% year-over-year on average across the last five quarters. Performance was hurt by a 35.4% decline in the fourth quarter of the last fiscal year from the year-earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from 50 cents a share to 45 cents over the last ninety days. For the fiscal year, the average estimate has moved down from $1.98 a share to $1.91 over the last ninety days.

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

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