Adobe Climbs

Adobe Systems (ADBE): $0.30 EPS non-GAAP on revenues of $649.4 million. Estimates were $0.29 EPS & $655.6 Million.

While this was under on some revenue estimates, this was toward the higher-end of its prior guidance.  Adobe’s GAAP diluted earnings per share for the first quarter offiscal 2007 were $0.24, based on 604.2 million weighted averageshares.

Q2 Guidance: Adobe announced it is targeting revenue of $700 million to $740 million (ESTIMATES are $717 million). The Company also is targeting a GAAP operating margin of approximately 23% to 25% percent in the second quarter. On a non-GAAP basis, the Company is targeting a second quarter operating margin of approximately 36% to 37%.  The Company also is targeting other income in its second quarter to be approximately $23 million to $24 million, with a GAAP tax rate of approximately 24% to 26% and a non-GAAP tax rate of approximately 25 to 27 percent.  Adobe is targeting its share count to be between 605 to 607 million shares in the second quarter of fiscal 2007.

For fiscal year 2007, Adobe announced it is reaffirming its annual revenue growth target of approximately 15 percent. The Company also reaffirmed it is targeting a GAAP operating margin of approximately 25% to 27% and a non-GAAP operating margin of approximately 37% to 38%.

ADBE closed up 1.24% at $40.74 in normal trading; shares are up 2.7% at $41.85 in after-hours; the 52-week high is $43.22.

Jon C. Ogg
March 20, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.