Adobe stock rose Thursday after the digital media and marketing software firm beat Wall Street's targets for its fiscal first quarter and guided higher for the full year. ADBE stock also retook a key support level.
The San Jose, Calif.-based company late Wednesday said it earned an adjusted $3.80 a share on sales of $4.66 billion in the quarter ended March 3. Analysts polled by FactSet had expected Adobe to earn $3.68 a share on sales of $4.62 billion. On a year-over-year basis, Adobe earnings rose 13% while sales climbed 9%.
For the current quarter, Adobe predicted adjusted earnings of $3.78 a share on sales of $4.77 billion. That's based on the midpoint of its guidance. Analysts had expected earnings of $3.76 a share on sales of $4.75 billion in the fiscal second quarter.
For the full year, Adobe raised its target for net new annualized recurring revenue from its core digital media business to $1.7 billion from $1.65 billion.
Also, for its fiscal 2023, Adobe projected adjusted earnings per share of $15.30 to $15.60. The midpoint of $15.45 topped Wall Street's goal of $15.29. Adobe's previous earnings outlook called for $15.15 to $15.45 a share.
ADBE Stock Climbs After Report
"Adobe drove record Q1 revenue and we are raising our annual targets based on the tremendous market opportunity and continued confidence in our execution," Chief Executive Shantanu Narayen said in a news release. "Creative Cloud, Document Cloud and Experience Cloud are mission-critical in fueling the global digital economy."
On the stock market today, ADBE stock jumped 5.9% to close at 353.29. During the regular session Wednesday, ADBE stock inched up a fraction to 333.61.
In a positive sign, ADBE stock climbed above its 50-day moving average line on Thursday, according to IBD MarketSmith charts. However, it remains a hair below its 200-day line.
Adobe has three cloud computing businesses. Its largest, Creative Cloud, includes software for creative professionals such as Photoshop and Illustrator. Document Cloud includes its Acrobat and e-signature offerings. Experience Cloud provides marketing software and services.
Figma Deal Uncertainty Batters Adobe Stock
ADBE stock has been pressured in recent weeks by reports that the U.S. Department of Justice plans to block Adobe's $20 billion acquisition of Figma. The Justice Department is concerned that Adobe's purchase of Figma would reduce options for design software used by creative professionals. Adobe makes such software applications as Photoshop, Illustrator, Premiere and Acrobat.
Adobe announced its intent to buy Figma, a web-first collaborative design platform, in September.
Still, Adobe expects to close the deal this year.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
