Adobe Systems Earnings: Streak of Four Straight Profit Declines Snapped

S&P 500 (NYSE:SPY) component Adobe Systems Incorporated (NASDAQ:ADBE) reported its results for the third quarter. Adobe Systems offers a line of creative, business, web, and mobile software and services used by creative professionals, knowledge workers, consumers, original equipment manufacturers, developers and enterprises.

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Adobe Systems Incorporated Earnings Cheat Sheet

Results: Net income for Adobe Systems Incorporated rose to $201.4 million (40 cents per share) vs. $195.1 million (39 cents per share) in the same quarter a year earlier. This marks a rise of 3.2% from the year-earlier quarter.

Revenue: Rose 6.6% to $1.08 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Adobe Systems Incorporated fell short of the mean analyst estimate of 47 cents per share. It fell short of the average revenue estimate of $1.11 billion.

Quoting Management: “Customers globally are adopting our new Creative Cloud subscription offering more quickly than we projected,” said Shantanu Narayen, president and CEO of Adobe. “We are the leader in the fast-growing Digital Marketing category with 40 percent year-over-year Digital Marketing Suite revenue growth this quarter.”

Key Stats:

After four consecutive quarters of year-over-year profit drops, the company reported a profit increase last quarter. In the second quarter, net income fell 2.4% from the year earlier, while the figure fell 21.1% in the first quarter, 35.4% in the fourth quarter of the last fiscal year and 15.2% in the third quarter of the last fiscal year.

Revenue has increased for four consecutive quarters. Revenue increased 9.9% to $1.12 billion in the second quarter. The figure rose 1.7% in the first quarter from the year earlier and climbed 14.3% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now fallen short of analyst estimates for the last three quarters. It missed the mark by 2 cents in the second quarter and by 4 cents in the first quarter.

Looking Forward: The average estimate for the fourth quarter is steady at 56 cents a share. The average estimate for the fiscal year is now $1.98 per share, down from $1.99 sixty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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