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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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. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend 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.