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.
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 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.
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.
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.
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.
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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.
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