Adobe Misses Earnings Estimates, But Investors Don’t Care
Adobe Systems (NASDAQ:ADBE) closed Tuesday’s regular trading session flat at $48.14 per share, but jumped as much as 4 percent in post-market trading after reporting fiscal third quarter earnings. Revenue fell 7.9 percent on the year to $995.1 million, missing the average analyst estimate of $1.01 billion but falling within Adobe’s guidance of between $975 million and $1.025 billion. Adjusted earnings per share fell 44.8 percent on the year to 32 cents per share, missing the average analyst estimate of 34 cents.
While the top and bottom line miss was somewhat underwhelming, Adobe reported that it left the quarter with more than 1 million Creative Cloud subscriptions, an increase of 331,000 on the quarter, representing stronger-than-expected growth. Adobe also completed its acquisition of Neolane, adding, as CEO Shantanu Narayen put it in the press release, “a critical cross-channel campaign management solution to the Adobe Marketing Cloud, which will further extend our leadership position in digital marketing.”
Mark Garret, executive VP and CFO, added that during the quarter, “41 percent of our revenue was recurring and we exited the quarter with record deferred revenue on our balance sheet. These results are building a stronger, more predictable revenue model for Adobe which will drive higher long-term growth.”