Adobe's 3Q earnings, outlook lift stock 7 pct
Adobe Systems Inc.'s third-quarter earnings edged past analyst estimates and the software maker predicted it would finish its fiscal year with a flourish as its products help meet growing demand for online video, photos and other digital content on a widening array of devices.
The San Jose, Calif.-based company said Tuesday that it made $195 million, or 39 cents per share, during the three months ending Sept. 2. That represented a 15 percent decline from $230 million, or 44 cents per share, at the same time last year.
If not for expenses to cover employee stock compensation and other items unrelated to its ongoing business, Adobe said it would have earned 55 cents per share. That figure was a penny above the average estimates of analysts surveyed by FactSet.
Revenue rose 2 percent to $1.01 billion, falling about $15 million shy of analyst predictions.
Investors, though, focused more on Adobe's optimistic outlook.
Excluding certain items, Adobe projected fiscal fourth-quarter earnings per share of 57 cents to 64 cents on revenue of $1.08 billion to $1.13 billion. The mid-range of that forecast put would put Adobe's earnings at 60 cents per share on revenue of $1.1 billion. The average analyst estimate called for Adobe to earn 58 cents per share on revenue of $1.07 billion.
Adobe's shares surged $1.73, or 7 percent, to $26.37 in Tuesday's extended trading after the company's outlook came out. The stock still remains closer to its 52-week low $22.67 than its high of $35.99.
Management expects its software, which includes Photoshop, Flash for video and Acrobat for documents, to benefit as people and businesses consume more content on computers, phones and tablets.
"Our industry is in the midst of a major transformation," said Adobe CEO Shantanu Narayen.