[ACCESSWIRE]
LONDON, UK / ACCESSWIRE / June 22, 2016 / ActiveWallSt.com announces its post-earnings coverage on Adobe Systems Inc. (NASDAQ: ADBE). The company announced its second-quarter fiscal 2017earnings results on Tuesday, June 21, 2016. Adobe reported better than expected earnings result for eleventh consecutive as subscription revenue climbed; however its full-year guidance disappointed investors. Register with us now for your free membership and see our complete earnings coverage on this equity at:
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Earnings Review
For Q2 FY16, Adobe reported adjusted earnings of $0.71 as compared to earnings of $0.48 in Q2 FY15, beating analysts' consensus earnings estimate of $0.68. The maker of Adobe Photoshop also reported a record $1.4 billion in revenue for Q2 FY16, up 20.4% as compared to revenue of $1.16 billion in Q2 FY15, meeting the median target of $1.40 billion in revenue.
Adobe's Digital Media segment revenue grew 26% on y-o-y basis to a record $943 million, while Creative revenue grew 37% to a record $755 million. Adobe Marketing Cloud also achieved record revenue of $385 million representing an 18% growth on y-o-y basis. Adobe also saw strong adoption and retention in the cloud, with new customers including FedEx Corporation (NYSE: FDX), Southwest Airlines Co. (NYSE: LUV), eBay Inc. (NASDAQ: EBAY) among others. Creative Cloud and Document Cloud carried digital media annualized recurring revenue to $3.41 billion.
Cash flow from operations was $489 million for the quarter ended on June 3, 2016. Cash, cash equivalents, and short-term investments totalled $4.32 billion during this period as compared to $3.99 billion in at the end of the previous fiscal year. Deferred revenue grew to $1.68 billion. During Q2 FY16, Adobe repurchased approximately 2.2 million shares for a total of $205 million.
Disappointing Guidance
Adobe forecasted Q3 FY16 earnings to be in the range of $0.69 to $0.75 on revenue between $1.42 and $1.47 billion against the analysts' consensus estimate of earnings in the range of $0.69 to $0.79 and revenue in the range of $1.42 billion to $1.47 billion. Adobe CFO, Mark Garrett, stated that: "Based on our first-half performance and momentum, we're on track to meet or exceed all of our annual fiscal year 2016 targets." Those targets include $2.80 in adjusted earnings per share and $5.8 billion in revenue. Analysts' consensus estimate was $2.84 in adjusted earnings with $5.83 billion in revenue for FY16.
Stock Performance
Pre-earnings release and at the close of yesterday's session, the stock close up 1.77% at $99.72, reaching an intraday high of $99.92 during the session. After hours, shares of Adobe were down 4.74% at $95.00 following the earnings release. The California-based company has profited from the increasing demand of digital media. Adobe shares have gained 21.20% in the past one year.
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