Adobe Earnings Brings All-Time High

By Jon C. Ogg Updated Jun 18, 6:42AM EDT · Published Jun 17, 5:51PM EDT

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Adobe Systems Inc. (NASDAQ: ADBE) shares are reacting so well to the company’s second-quarter earnings release that the stock is at new all-time highs on the news. Adobe said that it reached revenue of $1.07 billion, above the high end of its targeted range of $1.00 billion to $1.05 billion and above the Thomson Reuters consensus of $1.03 billion.

Adjusted earnings rose to $0.37 per share, also above the consensus estimate of $0.30 per share.

Other things are going well also. The company now has 2.308 million paid Creative Cloud subscriptions. This is up 464,000 subscriptions from the prior sequential quarter. Adobe further said that its Creative annualized recurring revenue rose to $1.20 billion, and its total Digital Media annualized recurring revenue grew to $1.38 billion. Adobe’s Marketing Cloud quarterly revenue was up 23% from last year to $283 million.

The company is forecasting its operating earnings for the third quarter of $0.22 to $0.28 per share, versus an estimate of $0.27 per share. Revenue was put in a range of $975 million to $1.025 billion, versus the consensus of $1.02 billion. Still, the company reiterated its target of at least 20% annual revenue growth and 30% bookings growth with its marketing cloud in 2014.

Cash flow from operations was $368 million, and it deferred revenue has now risen to a record $929 million. Adobe said that it repurchased roughly 2.6 million shares during the quarter, returning approximately $166 million of cash to stockholders.

Adobe ended the May 30 quarter with more than $3.3 billion in cash and short-term securities on the books.

Shares of Adobe ended the day down eight cents at $67.54, against a 52-week range of $42.97 to $71.11. The stock was up more than 8% at $73.20 in the after-hours session on Tuesday, an all-time on the chart if this level holds.

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.