Adobe Systems Q1 Results Beat Street View, But Outlook Below Estimates

Software giant Adobe Systems Inc. (ADBE), Tuesday reported a profit and revenues for the first quarter that easily trumped Wall Street estimates. Looking forward, the company issued an outlook for the second quarter that is below current estimates.

San Jose, California-based Adobe’s first-quarter profit rose to $1.266 billion or $2.66 per share from $1.261 billion or $2.61 per share last year.

Adjusted earnings for the quarter rose to $3.37 per share from $3.14 per share last year. On average, 26 analysts polled by Thomson Reuters expected earnings of $3.34 per share for the quarter. Analysts’ estimates typically exclude special items.

Adobe said it achieved record revenue in the quarter, which rose 9% to $4.262 billion from $3.905 billion last year. Analysts had a consensus revenue estimate of $4.24 billion for the quarter.

Digital Media segment revenue grew 9% to $3.11 billion, as creative revenue rose 7% to $2.55 billion and document cloud revenue was up 17% to $562 million.

Digital Experience segment revenue 13% to $1.06 billion, with digital experience subscription revenue up 15% to $932 million.

“Adobe achieved record Q1 revenue as Creative Cloud, Document Cloud and Experience Cloud continue to be pivotal in driving the digital economy,” said Shantanu Narayen, chairman and CEO, Adobe.

Looking forward to the second quarter, Adobe expects revenues of about $4.34 billion and adjusted earnings of around $3.30 per share. Analysts currently estimate earnings of $3.35 per share and revenues of $4.41 billion.

ADBE closed Tuesday’s trading at $466.45, up $12.86 or 2.84%, on the Nasdaq. The stock, however, slipped $7.70 or 1.65%, in the after-hours trading.

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