Credit: Shutterstock photoDigital media and marketing software maker Adobe Systems ( ADBE ) late Thursday beat Wall Street's targets for its fiscal fourth-quarter sales and earnings and guided analysts higher for the current quarter and fiscal year.
Adobe, a member of the IBD 50 stock list , reported adjusted earnings per share of $1.26, up 40% year over year, on sales of $2.01 billion, up 25%, in the quarter ended Dec. 1. Analysts expected adjusted earnings per share of $1.15 on sales of $1.95 billion, according to Zacks Investment Research.
For the current fiscal year, Adobe expects to earn an adjusted $5.50 a share, up 28% year over year, on revenue of $8.725 billion, up 20%. Analysts were modeling for adjusted earnings of $5.47 a share on sales of $8.69 billion, Zacks said.
For the just ended fiscal 2017, Adobe earned an adjusted $4.31 a share, up 43%, on sales of $7.3 billion, up 25%.
Adobe shares were up 1.6% in after-hours trading on the stock market today . During the regular session, Adobe fell 1% to 175.
For the current quarter, Adobe's fiscal first, the company expects to earn an adjusted $1.27 a share, up 35% year over year, on sales of $2.04 billion, up 21%. Analysts were modeling for $1.24 and $2.037 billion, Zacks said.
IBD'S TAKE:Adobe Systems stock is currently ranked No. 36 on the IBD 50 list of top-performing growth stocks.
"Our strong business momentum is driven by the market-leading solutions we provide to empower people to create, and businesses to digitally transform," Adobe Chief Executive Shantanu Narayen said in a press release.
Adobe exited the fourth quarter with annualized recurring revenue in its digital media business of $5.23 billion, a quarter-over-quarter increase of $359 million.
Annualized recurring revenue is a key metric for the company as it transitions from sales of licensed software to a cloud computing business model of software-as-a-service.
Adobe's creative software business, which includes Creative Cloud and products like Photoshop, accounted for 69.3% of its revenue in the fourth quarter. Its digital marketing business accounted for 28.5% of sales, with print and publishing making up the rest.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
