Adobe Earnings Rise

Adobe Systems Inc. reported better-than-expected earnings for its latest quarter as subscription revenue climbed, but the company's full-year guidance disappointed investors.

The California company, known for its flash player used to view web content and for its publishing software Photoshop, has benefited from growing demand for digital media. Over the past 12 months, shares in Adobe have gained 25% through Tuesday's close.

Despite a 20% jump in second-quarter sales and better-than-expected earnings results, the company's stock slid 4.1% in after hours trading. After lifting its view for the year on the heels of the prior quarter's results, Adobe reiterated that guidance Tuesday. The reiteration instead of another boost to guidance fell short of expectations, though the company said it might wind up topping current forecasts.

"Based on our first-half performance and momentum, we're on track to meet or exceed all of our annual fiscal year 2016 targets," said Chief Financial Officer Mark Garrett. Those targets include $2.80 in adjusted earnings per share and $5.8 billion in sales. Analysts surveyed by Thomson Reuters have been looking for $2.84 in adjusted per-share profit with $5.83 billion in revenue.

For the latest quarter, Adobe posted earnings of $244.1 million, up from $147.5 million a year earlier. On a per-share basis, earnings rose to 48 cents from 29 cents. Excluding stock-based compensation, among other items, earnings per share rose to 71 cents from 48 cents. Analysts had predicted 68 cents in adjusted earnings per share.

Revenue rose to $1.4 billion, matching analysts' expectations. A 28% decline in product revenue was offset by a 40% surge in subscription revenue.

Write to Lisa Beilfuss at [e-mail]

(END) Dow Jones Newswires

June 21, 2016 18:15 ET (22:15 GMT)

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