Apps & Software

Adobe Earnings, Good Not Good Enough (ADBE)

Adobe Systems Inc. (NASDAQ: ADBE) has reported earnings which met expectations on the surface.  The non-GAAP report was $0.57 in earnings per share on sales of $1.05 billion.  Thomson Reuters had estimates of $0.57 EPS on $1.05 billion in sales.

As far as guidance, Adobe sees second quarter earnings at $0.57 to $0.61 in earnings per share and sees the quarterly sales at $1.09 billion to $1.14 billion.  Thomson Reuters has estimates of $0.60 EPS and $1.1 billion in sales.

The company is now putting full 2012 estimates for a gain of 6% to 8% in sales and it sees adjusted earnings coming in a range of $2.38 EPS to $2.48 EPS.  Thomson Reuters has estimates of $2.42 EPS.

Having a “meet and guide sales and earnings in-line with estimates” quarter was just not going to be good enough.  Shares closed up 2% at $34.51 and the after-hours share reaction is currently down 5.5% at $32.63.  The 52-week trading range is $22.67 to $35.99.

If Adobe just makes its earnings figure for the year its closing bell price was 14.2-times projected earnings and about 3.2-times projected earnings.  Those multiples are not exactly expensive, but the market just doesn’t offer the same multiples for companies as it used to.

JON C. OGG

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