Is It Magic?

Recently I had an opportunity to investigate three companies for the paparazzi-inclined investor. Adobe Systems (Nasdaq: ADBE  ) , with its suite of photo-editing software, is one such enterprise that helps bring an average photo to life. Can it pull off the same magic on its newest first-quarter results?

Both revenues of $655.5 million and earnings per share of $0.32 -- excluding the effect of stock-based compensation and various one-time charges like those associated with its acquisition of Macromedia -- slightly edged out analyst expectations. Sales were 38.6% higher than the year-ago period, but this is largely due to its Macromedia acquisition. According to management remarks in the conference call, however, even Adobe's core revenue "grew at a double-digit pace."

For the first quarter, the company saw solid sales in all geographic regions including the Americas, Europe, and Asia-Pacific. Driving revenues is strong demand for its high-end Creative Solutions line of products, as well as Acrobat.

Going forward, management indicated that the integration with Macromedia is going better than originally anticipated. There will be some top-line fluctuations in its business in the periods ahead -- some of which are associated with revenue recognition issues from Macromedia. For instance, in the second quarter it now expects a range of $640 to $670 million in sales, below analyst estimates of $675 million. In the end it should all even out, since it still anticipates $2.7 billion in sales for the fiscal year, in line with Wall Street anticipation.

Adobe believes it is well-positioned to take advantage of what it called a "global market trend" toward digital usage and integration. One area it is particularly excited about is its digital video applications, which compete with Apple Computer (Nasdaq: AAPL  ) and Avid Technology (Nasdaq: AVID  ) , among others. Have you noticed how much more video content there is on the Web these days? Adobe is one company helping professionals and hobbyists make it possible.

There is nothing in its most recent results that suggest magic. Adobe just continues to go about its business, posting one solid quarter after another. This consistency has to be a comforting feeling for the long-term minded shareholder. It is tough to argue that this stock is cheap when its trading at over 30 times projected earnings, compared to an expected long-term growth rate of half that. But if I'm a shareholder (which unfortunately I am not), there is certainly no compelling reason to jump ship.

More paparazzi-style Foolishness:

• Analysts are going silly over SanDisk (Nasdaq: SNDK  ) .
• Does Canon (NYSE: CAJ  ) still have room for growth?
• And Eastman Kodak (NYSE: EK  ) continues its turnaround.

Fool contributor Jeremy MacNealy owns shares of Apple Computer, but has no financial interest in any of the other companies mentioned.