Adobe Systems Beats on Both Top and Bottom Lines (ADBE)

Adobe Systems Beats on Both Top and Bottom Lines

Adobe Systems (Nasdaq: ADBE ) reported earnings on June 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 1 (Q2), Adobe Systems beat slightly on revenues and beat slightly on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share didn't change.

Margins dropped across the board.

Revenue details
Adobe Systems logged revenue of $1.12 billion. The 23 analysts polled by S&P Capital IQ expected to see sales of $1.11 billion on the same basis. GAAP reported sales were 9.9% higher than the prior-year quarter's $1.02 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.60. The 26 earnings estimates compiled by S&P Capital IQ forecast $0.59 per share. GAAP EPS of $0.45 were the same as the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 88.4%, 90 basis points worse than the prior-year quarter. Operating margin was 26.9%, 10 basis points worse than the prior-year quarter. Net margin was 19.9%, 250 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.10 billion. On the bottom line, the average EPS estimate is $0.58.

Next year's average estimate for revenue is $4.48 billion. The average EPS estimate is $2.42.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,808 members out of 1,929 rating the stock outperform, and 121 members rating it underperform. Among 492 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 464 give Adobe Systems a green thumbs-up, and 28 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Adobe Systems is hold, with an average price target of $34.45.

New technology paradigms and mobile devices are driving the next wave of computing. Many older companies won't survive the change, while fortunes will be made by the first movers in the field. Where does Adobe Systems fit in? What's the fortune-making change? Check out "The Two Words Bill Gates Doesn't Want You to Hear.." Click here for instant access to this free report.

Add Adobe Systems to My Watchlist.

Jeff Fischer and team have demystified options. And they can rack up income like $1,030... $2,626... and $3,228 on a schedule you can set your watch by!
That's why we're glad to announce every single one of their closely guarded strategies is available to YOU during May and June – 100% FREE, no strings attached! Just enter your email address in the box below...

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Adobe Systems. Motley Fool newsletter services have recommended creating a diagonal call position in Adobe Systems.

Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.