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In today's Motley Fool Take:

obe Cashes In

By Seth Jayson

Adobe Systems (Nasdaq: ADBE) gets a lot of press for its gee-whiz graphics and design tools, but today the technology takes the backseat to the firm's sparkling first-quarter financial results. The performance leaves this Fool at a loss for words. There's little to say except "Wow."

When last we checked in with Adobe, it had updated its outlook for the first quarter, predicting bigger revenues and profits -- something that has become a welcome habit over the past few quarters. Today, it blew that update out of the water, beating the top end of the target by $18 million to post $423 million in revenue, a 43% increase year over year. Earnings of $0.50 per share beat the high end of the guidance target by 20%, and they were an incredible 127% better than last year's Q1.

Citing record revenues for its high-end electronic document services and continuing strength in sales of its Creative Suite -- which includes updated versions of perennial favorites like Photoshop and Acrobat, along with my favorite layout program, InDesign -- Adobe raised its 2004 outlook. It hopes for revenues near $1.5 billion and diluted EPS between $1.40 and $1.46. The targets represent 15% revenue growth and 30% earnings growth over last year.

The only nits to pick with Adobe might be its reluctance to share the wealth with stockholders. With $200 million in cash, $1 billion in short-term investments, and very healthy cash flows, you'd think it could up its dividend just a stitch from the current $0.0125 a quarter.

Despite the 8% jump today, putting shares near $40 per stub, Adobe trades at only 27 times forward estimates. That looks like a reasonable deal given its growth, and if an economic upturn can turbocharge its already fast-growing e-document business, the rewards will be even better.

Fool contributor Seth Jayson thinks InDesign is the greatest thing since canned beer. He owns plenty of Adobe software, but no Adobe stock. View his Fool profile here.

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Nike Scores Overseas

By Seth Jayson

If you think 50% growth is for tech stocks only, then you haven't been paying attention to what's going down at Nike(NYSE: NKE) these days.

For its third fiscal quarter, Nike posted 21% revenue growth and earnings made a Jordan-like -- or maybe we should pass the torch and say James-like -- jump to $0.74 per share, a 57% increase. Sure, the firm had already leaked most of this good news earlier in the month, but the official release contains other interesting tidbits, like a nice 1.4% improvement in gross margins and a 0.9% reduction in SG&A expenses.

Efficiency gains like these should soothe some who wondered if Nike has lost its mind, given the amount of money it's throwing at up-and-coming spokes-athletes. In my opinion, these are valid criticisms: Even though LeBron James has put up stellar numbers, going strictly by the books, his new shoe line still doesn't take in what Nike's putting out.

In fact, footwear sales in the U.S. eked up just a single point in the latest quarter. Equipment, Nike's smallest slice of the revenue pie, grew most quickly here at home, but the total uptick still only came in at 4%. Exchange-rate roulette helped juice overseas sales, including a 36% revenue upswing in Europe, of which nearly a third was owed to currency fluctuations. In Asia, where apparel sales grew at twice the footwear rate, the overall sales increase reached 21%, half of it due to the dropping dollar.

Notice the theme? It's reprised in the firm's forward outlook. The 9.9% gain in worldwide future orders that's today's headline darling owes 40% to the funny money situation as well. That's what makes me think Nike's stock, at a P/E of 23, might be a bit expensive these days. I'm partial to its smaller, nimbler competitor Reebok(NYSE: RBK), which trades at a lower multiple -- under 17 -- with a similar growth outlook.

Fool contributor Seth Jayson misses that old blaze-orange Nike cross-country shoe with the waffle sole. He owns no stake in any companies mentioned above. View his Fool profile here.

Di scussion Board of the Day: Nike

Can Nike keep its spectacular growth going? Was the $90 million price tag Nike paid to sign LeBron James worth it? You can't deny the basketball phenom is selling shoes on a par with basketball legend Michael Jordan. How does the shoe retailer stack up against rivals like Reebok, Adidas, and Puma? All this and more -- on the Nike discussion board.

Xb ox Drops

By Alyce Lomax (TMF Lomax)

It's not unusual for gamers to simulate street fights, and Microsoft's(Nasdaq: MSFT) about to treat competitor Sony(NYSE: SNE) to a little sucker punch. Mr. Softy's play for your street involves cutting the price of its Xbox gaming console to $149 from $179. This is good news to anybody who's been waiting for a better price before buying, and it's likely welcome news to investors in video game stocks, too.

The move is meant to take back some market share from Sony's PlayStation 2, which is currently still selling for $179. If you think back to the PlayStation 2 craze in 2000, you might recall that it not only enjoyed tons of fanfare (remember those gamers camped outside stores before launch day?), but it reached the market 18 months before the Xbox did. To this day, PlayStation 2's far and away the No. 1 console. Then, there's also Nintendo's GameCube to complicate matters.

While it's arguable that diehards already have their consoles of choice, this will entice those who may like video games but couldn't afford or justify shelling out $179. Meanwhile, especially now that Microsoft's made the move, it doesn't seem a question of if Sony will lower PlayStation 2 to the same price level, but when. Considering that neither Microsoft nor Sony plans next-generation versions for several years, right now there's hardly anything to get excited over other than the low price.

In a related note, the awaited console price cuts should drum up sales for some video game providers. Such names include Motley Fool Stock Advisor picks Electronic Arts(Nasdaq: ERTS) and Activision(Nasdaq: ATVI), as well as Take-Two Interactive(Nasdaq: TTWO), THQ(Nasdaq: THQI), and Acclaim(Nasdaq: AKLM). After all, the logic is that a new console is no big deal without an array of compatible games.

In last quarter's conference call (courtesy of CCBN StreetEvents), Microsoft noted Xbox growth, which offset some lagging in other areas of its home and entertainment segment. If Microsoft wants to line up loyalty for its next feature-rich, full-priced version of Xbox, now does seem the right time to strike.

Alyce Lomax does not own shares of the companies mentioned. Most of her exposure to video games is old school... think Atari. At one time, she could play a mean game of Asteroids.

Qu ote of Note

"I have not failed. I've just found 10,000 ways that won't work." -- Thomas Edison

Mo re on Fool.com Today

The bust of the dot-com bubble may still be fresh in the olifactory senses of Rick Munarriz, but he's got 5 Dot-Com Bargains that survived and may be worthy of your dollars now.... And Whitney Tilson's opens up the underbelly of the investment world to expose The Disgrace of Soft Dollars. Every investor ought to know about the practice.

In other news:

For a list of all our stories from today, see our Today's Headlines page.