The company authorized the repurchase up to $2 billion in common stock through the end of fiscal 2015. While the company noted that this will return value to its stockholders, it also came with the admission that this will minimize the dilution from stock issuances.  And while the repurchases were slated for the open market, Adobe also noted that it plans to enter into structured repurchase agreements with third parties. The last issue is the company noted is that this new buyback is “substantially similar to the company’s previous program authorizing the repurchase of up to $1.6 billion in common stock through fiscal 2012, which authority has been exhausted.”

The opinion of 24/7 Wall St. is that stock buybacks of this magnitude are the strategy of yesterday’s managers.  The stock is not exactly expensive at 13.7-times this year’s expected earnings of $2.44 EPS, but it is also not exactly cheap in a market where great technology leaders and great banks are trading at far lower multiples.

Perhaps the biggest sin here is that Adobe still pays no dividend.  The company came public back in 1986 and it currently pays no real dividend after more than 25 years of being public.  Management said this is meant to reaffirm the confidence and optimism in its long-term future and to return value to shareholders.  Nothing commits to long-term earnings more than a stable dividend as a commitment to ongoing earnings, and buybacks merely offset dilution and/or decrease the share count.

Adobe has nearly $3 billion in cash, short-term investments and long-term investments and it has only about $1.5 billion in long-term debt.  This company can afford to pay a dividend and that dividend could rather easily be $0.20 per quarter (or $0.80 per year) without coming close to the 40% rule of more established companies on the payout ratio against earnings.  A dividend of $0.80 per year would come to a yield of about 2.4% and that would be a higher starting point compared to when other tech giants have started paying dividends.

The trouble with Apple Inc. (NASDAQ: AAPL) is still an issue over Flash, even if some workaround Apps mitigate this.  Some consider Microsoft Corporation (NASDAQ: MSFT) as competition, but Adobe is often in a class of its own with Acrobat, Flash, and analytics metrics.  Microsoft pays a large dividend and even Apple has now committed to start on a dividend paying strategy.

Investors tend to yawn over most share buybacks and they tend to get excited about their capital getting returned to them via dividends.  Adobe just maintained a strategy that was more of the same.  At $33.55, the 52-week trading range is $22.67 to $35.99.  Analysts have only a $34.72 consensus price target according to Thomson Reuters, implying very limited upside unless new developments occur.

JON C. OGG

Among US companies included are General Electric Co. (NYSE: GE), Ford Motor Co. (NYSE: F), Intel Corp. (NASDAQ: INTC), Adobe Systems Inc. (NASDAQ: ADBE), Microsoft Corp. (NASDAQ: MSFT), Xerox Corp. (NYSE: XRX), Sempra Energy (NYSE: SRE), American Express Co. (NYSE: AXP), Deere & Co. (NYSE: DE), and Cisco Systems Inc. (NASDAQ: CSCO)

Notable exclusions include Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG), all of the supermajor oil companies, and the largest financial firms both in the US and the rest of the world.

The full list is available here.

The key technology dividend sinners are as follows: Adobe Systems Inc. (NASDAQ: ADBE); Dell Inc. (NASDAQ: DELL); eBay Inc. (NASDAQ: EBAY); EMC Corporation (NYSE: EMC); Google Inc. (NASDAQ: GOOG); Symantec Corporation (NASDAQ: SYMC); and Yahoo! Inc. (NASDAQ: YHOO).

We have given some detail on each here, including the history and how able a company is to begin paying a dividend.  In the total liquidity calculations we have included what the companies list as their cash, cash equivalents, short-term investments, and also included the long-term investments.  No consideration has been made for inventory, receivables, and other hard assets.  Another metric we used was a 40% income payout model to see what sort of yields investors could get without even touching the capital reserves.  We have used operating and non-GAAP estimates for calculating theoretical dividend yields.

Adobe Systems Inc. (NASDAQ: ADBE) is in the dividend sinning club out of the S&P 500 technology group.  The company has a market value of close to $16 billion and it has been a public company since the 1980′s if you can believe it.  The company does not pay a dividend currently and it has not indicated any intention to.  With markets being mostly established, we would wonder if it needs to hold back more capital for even more acquisitions.  The company has over $3 billion in liquidity on its books.  Adobe could offer a yield of about 2.9% if it were to adopt a 40% adjusted income payout to shareholders.

Dell Inc. (NASDAQ: DELL) has been making acquisitions here and there to bolster its move from just being a PC company into a PC and information technology company.  While it has more than $6 billion in direct long-term debt, Dell also has what is close to $20 billion in total liquidity.  Rivals HP and IBM pay dividends and now Apple pays a dividend.  What is so interesting here is that with a $30 billion market value, Dell could be a candidate for a solid one-time dividend this year and a hefty payout ratio going forward.  It is just too hard to argue that its core market is growing.  What is amazing is that Dell could pay out roughly a 4.9% dividend yield if it adopted a 40% of adjusted earnings to be paid out as dividends with touching a penny of its cash on hand.

eBay Inc. (NASDAQ: EBAY) is a dividend sinner of epic proportions.  It has made acquisitions and it has made sales, and the real growth now lies in the PayPal market rather than in the auction markets.  The only real need for eBay to keep a hold of its $8+ billion in total liquidity is if it can find a huge international outfit to buy.  If eBay adopted a 40% payout ratio of income, without even considering its mountain of cash today on the books, eBay could be offering shareholders a 2.4% yield without denting its cash and reserves.

EMC Corporation (NYSE: EMC) has proven to grow and grow in the world of storage.  With the cloud growth and with storage being nearly infinite, the company has been able to grow organically and via acquisitions and has preferred to use its capital for growth over dividends.  It also owns a super-majority stake in VMware Inc. (NYSE: VMW).  The storage leader has almost $11 billion in total liquidity and it carries almost no long-term debt.  Without touching a penny of its cash and liquidity, a 40% adjusted income payout would generate a dividend yield of almost 2.4%.

Google Inc. (NASDAQ: GOOG) may be in the midst of a Motorola integration and acquisition, but it seems unlikely that it will need its cash arsenal in order to make a large acquisition. With such a huge amount of the search market, other acquisitions might be just yet another distraction from the core markets.  As of December 31, 2011, its total liquidity was a whopping $44.6 billion against a market cap of just over $200 billion.  Google could easily pay a 10% one-time dividend while dividend tax rates are low and could offer a hefty quarterly dividend and still grow its cash in the years ahead.  If Google paid out 40% of its adjusted income without considering one-cent of its mountain of cash it could offer a 2.6% dividend yield today.

Symantec Corporation (NASDAQ: SYMC) has such little shareholder enthusiasm that it needs to consider more return of capital.  It did just recently announce a $1 billion share buyback against its $13.3 billion market cap.  The company has about $2.4 billion in liquidity, but it also has about $2 billion in direct long-term debt.  If the company did not use any leverage, a 40% income payout ratio would actually give a dividend yield of about 3.5% as of today.  With shares around $18.00, this one has been stuck like chuck in a long-term range of $15 to $20 since its huge Veritas acquisition.

Yahoo! Inc. (NASDAQ: YHOO) is the obvious candidate for a dividend.  Management has decided to keep that liquidity arsenal of more than $7 billion at bay to help fund its turnaround.  It is also hard to know what will become of the Alibaba and Yahoo! Japan stakes for liquidity in the equation.  If Yahoo! were to just pay out 40% of its expected earnings from operations without tapping any cash on hand then it could offer a 2.1% dividend yield today without much worry.  This is an ongoing call and it will not likely be answered until the international assets are properly monetized.

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JON C. OGG

Adobe Systems Inc. (NASDAQ: ADBE) Raised to Sector Perform at RBC.

Airgas Inc. (NYSE: ARG) Started as Overweight at Morgan Stanley.

Air Products and Chemicals, Inc (NYSE: APD) Started as Underweight at Morgan Stanley.

Apple Inc. (NASDAQ: AAPL) Reiterated at Buy and raised target to $740 at Stern Agee; Reiterated Buy and raised target to $700 at Credit Suisse.

ARM Holdings PLC (NASDAQ: ARMH) Raised to Overweight at Barclays.

CA Inc. (NASDAQ: CA) Cut to Sector Perform at RBC.

Digital River Inc. (NASDAQ: DRIV) Cut to Sector Perform at RBC.

Domino’s Pizza Inc. (NYSE: DPZ) Cut to Underperform at BofA/ML.

Guess? Inc. (NYSE: GES) named as Bear of the Day at Zacks.

Harley-Davidson, Inc. (NYSE: HOG) Raised to Outperform at BMO.

Kinder Morgan Inc. (NYSE: KMI) Cut to Underperform at BofA/ML.

Lions Gate Entertainment Corporation (NYSE: LGF) Started as Overweight at JPMorgan; Hunger Games looks larger than Twilight.

OmniVision Technologies, Inc. (NASDAQ: OVTI) Raised to Buy at Needham.

United Parcel Service (NYSE: UPS) Cut to Hold at Stifel Nicolaus.

United Technologies Corporation (NYSE: UTX) Reiterated near-term Hold and long-term Buy.

If you enjoyed the top analyst upgrades and downgrades, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox.  We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

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JON C. OGG

As far as guidance, Adobe sees second quarter earnings at $0.57 to $0.61 in earnings per share and sees the quarterly sales at $1.09 billion to $1.14 billion.  Thomson Reuters has estimates of $0.60 EPS and $1.1 billion in sales.

The company is now putting full 2012 estimates for a gain of 6% to 8% in sales and it sees adjusted earnings coming in a range of $2.38 EPS to $2.48 EPS.  Thomson Reuters has estimates of $2.42 EPS.

Having a “meet and guide sales and earnings in-line with estimates” quarter was just not going to be good enough.  Shares closed up 2% at $34.51 and the after-hours share reaction is currently down 5.5% at $32.63.  The 52-week trading range is $22.67 to $35.99.

If Adobe just makes its earnings figure for the year its closing bell price was 14.2-times projected earnings and about 3.2-times projected earnings.  Those multiples are not exactly expensive, but the market just doesn’t offer the same multiples for companies as it used to.

JON C. OGG

The unofficial closing bells put the DJIA up more than 6 points to 13,239.06 (0.05%), the NASDAQ rose more than 23 points (0.75%) to 3,078.32, and the S&P 500 rose 0.40% or nearly 6 points to 1,409.75.

There were several analyst upgrades and downgrades today, including Arch Coal Inc. (NYSE: ACI) cut to ‘sell’ at Goldman Sachs; Capital One Financial Corp. (NYSE: COF) raised to ‘buy’ at Jefferies; Gap Inc. (NYSE: GPS) raised to ‘outperform’ at BMO; Sprint Nextel Corp. (NYSE: S) cut to ‘underperform’ at Bernstein; and United Parcel Service (NYSE: UPS) raised to ‘overweight’ at JPMorgan.

Earnings reports since markets closed last Friday have led to some price changes as of the last half hour of trading today: Hastings Entertainment Inc. (NASDAQ: HAST) is down -XX% at $XX; and InterOil Corp. (NYSE: IOC) is down -XX% at $XX. After markets close today Adobe Systems Inc. (NASDAQ: ADBE) and Focus Media Holding Ltd. (NASDAQ: FMCN) are scheduled to report earnings.

Other standouts from today include the following stocks:

LDK Solar Co. Ltd. (NYSE: LDK) is down more than 5% at $4.64. The Chinese solar maker lowered estimates for the fourth quarter and issued soft estimates for 2012. More coverage here.

QR Energy Inc. (NYSE: QRE) is up more than 4% at $23.27. The oil & gas upstream company announced an acquisition this morning. More coverage here.

Ampio Pharmaceuticals Inc. (NASDAQ: AMPE) is up nearly 42% at $3.80. The drug firm reported good results on new drug to treat macular disease. More coverage here.

Ceres Inc. (NASDAQ: CERE) is up more than 15% at $17.52 after posting a new post-IPO high of $18.70 earlier today. More coverage here.

Stay tuned for Tuesday. Federal Reserve Chairman Ben Bernanke and Minneapolis Fed President Naryana Kocherlakota are giving a speeches. We have also noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – Housing starts
• 11:30 a.m. – 4-week bill auction

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Thomson Reuters has estimates of $0.57 EPS and $1.05 billion in revenues; next quarter estimates are $0.60 EPS and $1.1 billion in revenues.  Thomson Reuters has a consensus price target of $32.32, which is currently under the current share price.  With the price targets on average being lower than the share price it is almost certain that for everyone to remain happy that Adobe has to do a “beat and raise estimates” earnings report.

Shares are currently around $33.75 and the 52-week trading range is $22.67 to $35.99.

JON C. OGG

The EU agrees to an embargo on Iranian oil. (Reuters)

Citing defense cuts, Boeing (NYSE: BA) closes it plant in Wichita. (Reuters)

Japan Air plans to list its shares in a $13 billion IPO. (Reuters)

Apple (NASDAQ: AAPL) hires an Adobe (NASDAQ: ADBE) executive to run its iAd business. (Reuters)

Fiat raises its ownership in Chrysler to 58.5%. (Reuters)

Eastman Kodak (NYSE: EK) to declare bankruptcy later this month. (WSJ)

Congress will examine which ratings firms failed to do more to warn on MF Global’s European investments. (WSJ)

Apartment vacancy rates fall as people prefer renting over buying. (WSJ)

Comcast (NASDAQ: CMCSA) and Walt Disney (NYSE: DIS) will put more video from TV behind pay walls on the web. (WSJ)

Farmers face a shortage of corn. (WSJ)

BMW sales top Mercedes in the U.S. for 2011. (WSJ)

The Federal Reserve calls on Congress to do more about the battered housing market. (WSJ)

Prime Minister Lucas Papademos says Greece faces default if it does not receive a second bailout. (WSJ)

Verizon Wireless sells 4.2 million iPhones in the fourth quarter, which will damage its margins. (WSJ)

U.S. auto sales rise strongly in December. (WSJ)

Chevron (NYSE: CVX) faces a decision from an Ecuador court on environmental issues that may dog the U.S. company for years. (WSJ)

Barnes & Noble (NYSE: BKS) puts its Sterling Publishing unit up for sale. (WSJ)

Auto lenders target people who fall behind on home mortgages. (WSJ)

China will create new measures to make it easier for banks to clear yuan across borders. (WSJ)

Nielsen SoundScan says sales of full albums rose 1.3% last year to 330.6 million. (NYT)

If the Strait of Hormuz is closed, oil prices could quickly rise 50% and gas to $4. (NYT)

Americans have less economic mobility than people in many other nations. (NYT)

Spain says that its banks would need 50 billion euro to clean up their balance sheets. (FT)

France will try to raise $10.4 billion at low rates to demonstrate confidence in its economy. (Bloomberg)

Toyota’s (NYSE: TM) sales in China rose only 4% last year, underperforming the market. (Bloomberg)

Apple’s profit margins probably rose because of pressure it put on supplier Foxconn. (Bloomberg)

Douglas A. McIntyre

Adobe Systems Inc. (NASDAQ: ADBE) rose after reporting earnings of $0.67 EPS on revenues of $1.15 billion, while Thomson Reuters for earnings of 60 cents a share in the quarter on revenue of $1.09 billion. Adobe sees non-GAAP profits of ranging from 54 to 59 cents a share for its fiscal first quarter ending in February and $2.37 to $2.47 a share for the full year. Those views compare to the current average analyst estimates for earnings per share of 58 cents and $2.44 in the respective periods. Shares are up 4.7% at $27.70.

athenahealth, Inc. (NASDAQ: ATHN) is trading up about 3% at $50.50 after both Leerink Swann and Oppenheimer raised their analyst ratings.

Cablevision Systems Corporation (NYSE: CVC) is indicated down 7% after COO Rutledge resigned from the company. Interestingly enough, Reuters said that this means Cablevision could end up being in play after the resignation.

Cameron International Corporation (NYSE: CAM) is trading up about 2.2% at $45.85 after BP agreed to indemnify Cameron against current and future claims in the Deepwater Horizon disaster.

CryptoLogic Limited (NASDAQ: CRYP), which would win from any loosening online gambling regulations in America, surged in the after-hours on news that it has agreed to a buyout offer by the Amaya Gaming Group at $2.50 per share.  Shares were up 35% last night at $2.14 and the 52-week trading range was $0.84 to $2.19.

Ista Pharmaceuticals, Inc. (NASDAQ: ISTA) is seeing a major pop with shares up more than 60% after the proposed $6.50 per share acquisition and buyout proposal from Valeant Pharmaceuticals International, Inc. (NYSE: VRX).  Valeant is about 75-times the size of Ista, and the $6.22 share price of Ista compares to a $3.89 close on Thursday and compares to a 52-week range of $2.88 to $11.39.

Marvell Technology Group Ltd. (NASDAQ: MRVL) has not yet traded but is indicated higher by almost 1% after increasing its share buyback plan by $500 million last night.

Research in Motion Limited (NASDAQ: RIMM) just cannot get its act together.  Despite what appeared to be an earnings beat, RIM guided lower, delayed a new launch due to chipset concerns, it keeps remaining on the same path, and it keeps losing market share despite having nearly 75 million Blackberry subscribers.  This company just needs new management and it really needs to figure out a way to show that its security is far superior than that of smartphones from Apple or Google. Shares are down 10% at $13.58 in the pre-market session.

RSC Holdings, Inc. (NYSE: RRR) is going to be up about 50% on the United Rentals buyout at $18.00 per share.

Sina Corporation (NASDAQ: SINA) is trading lower by more than 4.3% at $50.50 after China is going to start requiring microblog users (which Sina hosts) to get users’ real names before allowing them to access posting privileges.

All of these are pre-market trading indications and some are likely to change substantially throughout the trading day.

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JON C. OGG

The unofficial closing bells put the DJIA down nearly 132 points to 11,823.48 (-1.1%), the NASDAQ fell nearly 40 points (-1.55%) to 2,539.31, and the S&P 500 fell -1.13% or nearly 14 points to 1,211.82.  So far this week, the indexes have closed lower every day.

There were several analyst upgrades and downgrades today, including General Electric (NYSE: GE) reiterated as ‘outperform’ with the target price raised to $22 at Credit Suisse. Other ratings actions today include Yahoo Inc. (NASDAQ: YHOO) restarted as ‘sell’ at Goldman Sachs; Yum! Brands Inc. (NYSE: YUM) reiterated as ‘buy’ and target price raised to $60 at Argus; Altria Group Inc. (NYSE: MO) cut to ‘hold’ at Stifel Nicolaus; and Avon Products Inc. (NYSE: AVP) raised to ‘outperform’ at BMO Capital. Groupon Inc. (NASDAQ: GRPN) received ratings from a slew of analysts this morning, and the results are in our full ratings coverage.

Here are today’s post-earnings news reactions with prices during the last half-hour of trading: Joy Global Inc. (NYSE: JOY) is down nearly -11% at $75.54 and Synovis Life Technologies Inc. (NASDAQ: SYNO) is up 0.2% at $27.83. Synovis received a buyout offer yesterday at $28/share from Baxter International Inc. (NYSE: BAX). Tomorrow’s big earnings releases come from Adobe Systems Inc. (NASDAQ: ADBE), Discover Financial Services (NYSE: DFS), and Fedex Corp. (NYSE: FDX).

Other standouts from today include the following stocks:

First Solar Inc. (NASDAQ: FSLR) is down more than -21% at $33.46, after posting a new 52-week low of $33.08 earlier today. The solar PV maker lowered guidance this morning. See our coverage here.

Avon Products Inc. (NYSE: AVP) is up almost 5.5% at $17.02. The cosmetics company is replacing CEO Andrea Jung. We have more on the story here.

eOn Communications Corp. (NASDAQ: EONC) is up about 108% at $2.12. The online marketing company reported good earnings yesterday, but not that good. Investors must be anticipating a buyout offer.

Silicon Graphics International Corp. (NASDAQ: SGI) is down nearly -17.5% at . The computer maker’s president/CEO has resigned, effective January 1st, to take a position as president and CEO at another company.

SunPower Corp. (NASDAQ: SPWR) is down more than -15% at $5.35, after posting a new 52-week low of $5.34. The solar maker is caught in the general sell-off of solar stocks following the lowered guidance from First Solar.

RADVision Ltd. (NASDAQ: RVSN) is down nearly -12% at $8.57. The communications equipment maker’s shares jumped more than 14% yesterday on talk of a buyout by Avaya. The falling share price is very likely discounting yesterday’s rumor.

Stay tuned for a busy Thursday. Here are some other noteworthy events on the schedule (all times Eastern):

• 8:30 a.m. – New unemployment claims report
• 8:30 a.m. – Producer price index report
• 8:30 a.m. – Empire State Manufacturing survey
• 9:15 a.m. – Industrial production report
• 9:45 a.m. – Bloomberg consumer comfort index
• 10:00 a.m. – Philadelphia Federal Reserve survey
• 10:30 a.m. – EIA weekly natural gas report
• 1:00 p.m. – 5-year TIPS auction
• 4:30 p.m. – Federal Reserve balance sheet and money supply report

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