Adobe profit beats analysts estimates; forecast disappoints
SCI & TECH
By Reuters | June 17th 2015
SCI & TECH
Photoshop maker Adobe Systems Inc reported a better-than-expected profit for the sixth straight quarter, helped by a 12 percent sequential jump in annualized recurring revenue in its digital media segment.
However, the company's shares fell about 2 percent in extended trading after it forecast lower-than-expected revenue and profit for the current quarter.
Adobe said on Tuesday it expected an adjusted profit of 45-51 cents per share on revenue of $1.18 billion-$1.23 billion for the third quarter.
Analysts were expecting a profit of 54 cents per share and revenue of $1.25 billion, according to Thomson Reuters I/B/E/S.
FBR Capital Markets analyst Samad Samana said the company usually gives "conservative" forecasts and then beats them.
"I think some people would like to see not just a conservative (forecast) and beating that, but maybe perhaps even stronger results as the benefits of this multi-year transition start to show up," he said.
Adobe is switching from traditional box licenses to web-based subscriptions for its Creative Cloud software bundle for more predictable recurring revenue. Online subscriptions let customers access the latest software versions for a monthly payment.
The company said it expects revenue in its print and publishing business to be relatively flat in the current quarter with the second.
Adobe earlier on Tuesday launched Adobe Stock, a collection of 40 million photographs, illustrations and graphics, available in 36 countries and 13 languages.
The company's net income rose to $147.5 million, or 29 cents per share, in the second quarter ended May 29, from $88.5 million, or 17 cents per share, a year earlier.
Excluding items, the company earned 48 cents per share, beating analysts' average estimate of 45 cents per share.
Total revenue rose 8.8 percent to $1.16 billion, in line with analysts' average estimate.
Up to Tuesday's close, the company's shares had risen about 10 percent this year.
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