The 10-second takeaway
For the quarter ended March 2 (Q1), Adobe Systems met expectations on revenues and met expectations on earnings per share.
Compared to the prior-year quarter, revenue improved slightly, and GAAP earnings per share shrank significantly.
Gross margins expanded, operating margins shrank, and net margins shrank.
Adobe Systems booked revenue of $1.05 billion. The 25 analysts polled by S&P Capital IQ hoped for a top line of $1.05 billion on the same basis. GAAP reported sales were 1.7% higher than the prior-year quarter's $1.03 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.57. The 27 earnings estimates compiled by S&P Capital IQ averaged $0.57 per share on the same basis. GAAP EPS of $0.37 for Q1 were 20% lower than the prior-year quarter's $0.46 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 89.6%, 10 basis points better than the prior-year quarter. Operating margin was 27.4%, 200 basis points worse than the prior-year quarter. Net margin was 17.7%, 510 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $1.11 billion. On the bottom line, the average EPS estimate is $0.60.
Next year's average estimate for revenue is $4.50 billion. The average EPS estimate is $2.43.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,830 members rating the stock outperform and 116 members rating it underperform. Among 555 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 527 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 outperform, with an average price target of $32.25.
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