Adobe Profit Rises, Lifts Outlook; Stock Up 7%

(RTTNews) - Software giant Adobe Systems Inc. (ADBE), Thursday reported a surge in first-quarter profit as revenues jumped 25 percent with both earnings and revenues topping Wall Street estimates. The photoshop maker raised it outlook for the full year sending its shares up 7 percent in after-hours trade.

San Jose, California-based Adobe's first-quarter profit surged to $254.3 million or $0.50 per share from $84.9 million or $0.17 per share last year.

Adjusted earnings for the quarter were $0.66 per share, up from $0.44 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.61 per share for the quarter. Analysts' estimates typically exclude special items.

Adobe said its revenue for the quarter jumped 25 percent to $1.38 billion from $1.11 billion a year ago. Analysts had a consensus revenue estimate of $1.34 billion for the quarter.

CEO Shantanu Narayen said, "Our exceptional performance in Q1 is an indicator of the strong momentum we are seeing across our cloud businesses as we drive the experience economy."

Digital Media segment revenue grew by 33 percent year-over-year to $932 million, with creative revenue up 44 percent.

Mark Garrett, Adobe executive vice president and chief financial officer. "Based on our strong Q1 results and business momentum, we are increasing our annual revenue and earnings targets for the year."

Looking forward to the second quarter, Adobe expects revenues of $1.37 to $1.42 billion. Analysts currently estimate earnings of $0.65 per share on revenues of $1.39 billion.

Adobe now expects full year adjusted earnings of $2.80 on revenues of about $5.8 billion, up from prior target of about $2.70 per share and revenues of around $5.7 billion. Analysts currently estimate earnings of $2.76 per share on revenues of $5.74 billion for 2016.

ADBE closed Thursday's trading at $89.96, up $1.79 or 2.03%, on the Nasdaq. The stock further gained $7.13 or 7.93% in the after-hours trade.