Shout It From Adobe's Rooftop: Fool by Numbers

Fast facts the Fool way.

By Anders Bylund – Updated Apr 5, 2017 at 5:38PM EST

On Sept. 17, creativity software maker Adobe Systems (NASDAQ:ADBE) released third-quarter 2007 earnings for the period ended Aug. 31, 2007.

Adobe blew its own guidance away, leaving the upper end of the revenue guidance range $52 million behind and eating the company's dust. The GAAP-diluted EPS came in at $0.34 -- well ahead of its target of $0.28-$0.31.
The company spent $727 million on share repurchases this quarter and bought back about 9 million shares above and beyond expectations, and up from $34.9 million a year ago.
Management expects to do at least this well in the fourth quarter on every count. Revenues and margins are supposed to grow, and the buyback continues.
All these good things are happening because the recent round of updated software releases is doing astonishingly well in the marketplace. The sales directors responsible for Corel (NASDAQ:CREL) Draw and Microsoft (NASDAQ:MSFT) SilverLight clearly live in interesting times right now -- in the Chinese sense of that phrase.

(Figures in millions, except per-share data)

Income Statement Highlights

	Q3 2007	Q3 2006	Change
Sales	$852	$602	41.4%
Net Profit	$205	$94	117.4%
EPS	$0.34	$0.16	112.5%
Diluted Shares	597.3	600.9	(0.6%)

Get back to basics with the income statement.

Margin Checkup

	Q3 2007	Q3 2006	Change*
Gross Margin	89.1%	88.5%	0.7
Operating Margin	29.9%	18.3%	11.7
Net Margin	24.1%	15.7%	8.4

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q3 2007	Q3 2006	Change
Cash + ST Invest.	$1,956	$1,986	(1.5%)
Accounts Rec.	$261	$285	(8.3%)
Inventory	$0	$0	N/A

Liabilities	Q3 2007	Q3 2006	Change
Accounts Payable	$64	$39	66.7%
Long-Term Debt	$0	$0	N/A

The balance sheet reflects the company's health.

Cash Flow Highlights

	Q3 2007	Q3 2006	Change
Cash From Ops.	$425	$191	122.1%
Capital Expenditures	$32	$19	70.6%
Free Cash Flow	$393	$173	127.7%
Owner Earnings	$255	$150	69.8%

Free cash flow is a Fool's best friend.

Related Foolishness:

Anders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL's Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.

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Shout It From Adobe's Rooftop: Fool by Numbers

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