Adobe Systems Inc.
) is set to report first-quarter 2014 results on Mar 18. Last
quarter, it posted 5.3% negative surprise. Let's see how things
are shaping up for this announcement.
Growth Factors This Past Quarter
Adobe's fourth-quarter earnings of 18 cents exceeded the Zacks
Consensus Estimate by a penny due to solid cost management and
higher revenues. Revenues were up sequentially and at the higher
end of management's guidance range due to the accelerated
adoption of creative cloud subscription pricing model.
Margin expansion was limited due to the change in sales mix,
which favored lower-margin products.
For the second quarter, management expects revenues in the
range of $950 million to $1.0 billion, down 6.7% sequentially at
the mid-point. Adobe expects non-GAAP earnings per share in the
range of 22-28 cents, well above the Zacks Consensus Estimate of
Our proven model does not conclusively show that Adobe will
beat earnings this quarter. That is because a stock needs to have
both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. That is not the
case here as you will see below.
Both the Most Accurate estimate and the Zacks Consensus Estimate
stand at 12 cents. Hence, the difference is 0.00%.
Adobe's Zacks Rank #3 (Hold) when combined with a 0.00% ESP makes
surprise prediction difficult.
We caution against stocks with Zacks Ranks #4 and 5
(Sell-rated stocks) going into the earnings announcement,
especially when the company is seeing negative estimate revisions
Other Stocks to Consider
You could consider other stocks with a positive earnings ESP
and a Zacks Rank #1, 2 or 3 such as:
Emerge Energy Services LP
), with Earnings ESP of +8.96% and a Zacks Rank #1.
Ring Energy, Inc.
), with Earnings ESP of +50.00% and a Zacks Rank #2 (Buy).
Chesapeake Granite Wash Trust
), with Earnings ESP of +6.45% and a Zacks Rank #2.
ADOBE SYSTEMS (ADBE): Free Stock Analysis
CHESAPEAKE GRNT (CHKR): Free Stock Analysis
EMERGE ENRG SVC (EMES): Free Stock Analysis
RING ENERGY INC (REI): Free Stock Analysis
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