The 10-second takeaway
For the quarter ended Nov. 30 (Q4), Adobe Systems beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue was unchanged and GAAP earnings per share grew significantly.
Gross margins dropped, operating margins shrank, net margins grew.
Adobe Systems reported revenue of $1.15 billion. The 21 analysts polled by S&P Capital IQ predicted a top line of $1.10 billion on the same basis. GAAP reported sales were 0.1% higher than the prior-year quarter's $1.15 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 $0.61. The 23 earnings estimates compiled by S&P Capital IQ forecast $0.56 per share. GAAP EPS of $0.44 for Q4 were 26% higher than the prior-year quarter's $0.35 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 89.2%, 70 basis points worse than the prior-year quarter. Operating margin was 26.7%, 290 basis points worse than the prior-year quarter. Net margin was 19.3%, 420 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.05 billion. On the bottom line, the average EPS estimate is $0.57.
Next year's average estimate for revenue is $4.41 billion. The average EPS estimate is $2.37.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 1,776 members out of 1,897 rating the stock outperform, and 121 members rating it underperform. Among 499 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 471 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 $34.42.
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