What to Look for in Adobe Earnings

Adobe Systems Inc. (NASDAQ: ADBE) is set to report its fiscal first-quarter financial results after the markets close on Thursday. The consensus estimates from Thomson Reuters are $0.61 in earnings per share (EPS) on $1.34 billion in revenue. In the same period of the previous year, the company posted EPS of $0.44 and $1.11 billion in revenue.

This old-school software company operates in three segments. The Digital Media segment provides tools and solutions that enable individuals, small and medium businesses and enterprises to create, publish, promote and monetize their digital content.

The Digital Marketing segment offers solutions for how digital advertising and marketing are created, managed, executed, measured and optimized. This segment provides analytics, social marketing, targeting, media optimization, digital experience management and cross-channel campaign management solutions, as well as video delivery and monetization to digital marketers, advertisers, publishers, merchandisers, Web analysts, chief marketing officers, chief information officers and chief revenue officers.

The Print and Publishing segment offers products and services, such as eLearning solutions, technical document publishing, Web application development and high-end printing, as well as publishing needs of technical and business, and original equipment manufacturers printing businesses.
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Adobe is a reasonably safe route for investors looking to own a company with marketing automation products, which have become huge.

Ahead of the earnings report, a few analysts weighed in on Adobe:

• Goldman Sachs has a Neutral rating with a $101 price target.
• Citigroup has a price target of $92.
• RBC Capital’s price target is $101.
• Argus has a Buy rating with a $110 price target.

So far in 2016, Adobe has underperformed the broad markets, with the stock down nearly 8%. Over the past 52 weeks, the stock was up 11%.

Shares of Adobe were trading up 1.1% at $87.79 on Wednesday, with a consensus analyst price target of $102.70 and a 52-week trading range of $71.27 to $96.42.