The Trigger For Adobe Systems Incorporated (NASDAQ:ADBE)

Posted by George Brook December 16, 2013 0 Comment 1024 views

Adobe Systems Incorporated (NASDAQ:ADBE)’s upside 4Q13 surprise in subscription revenue helped it marked a fresh high of $61.09 on Friday before the stock closed at $60.89. More than 15.8 million shares get traded on Friday, against its 30 day average volume of 4.08 million shares. Presently the stock is trading almost 73% above its 52 week low of $35.19 and 27.54% above its 200 day simple moving average.

Adobe Systems Inc. (NASDAQ:ADBE) has delivered 61.6% returns year to date, overshadowing its peers Autodesk, Inc. (NASDAQ:ADSK) and Microsoft Corporation (NASDAQ:MSFT) which have delivered 35.03% and 37.30% returns, respectively, in the same period.

Revenue Highlights

Adobe Systems Inc. (NASDAQ:ADBE) reported 4Q13 revenues of $1.04 billion which suggest 9.7% year over year revenue decline and around 4.7% increase compared to 3Q13. The company attributed its sequential revenue increase to the fast-tracked adoption of creative cloud subscription pricing model.

Subscription reported the highest 84.9% year over year increase and contributed to 34.5% of total revenue. Services & Support revenue also increased 8.2% on a year over year basis. However, Products which contributed 54.4% of Adobe Systems Inc. (NASDAQ:ADBE)’s total revenue were down 33.5% year over year.

Overall Performance

Adobe Systems Inc. (NASDAQ:ADBE) reported 4Q13 gross margin at 85.8% as compared to 89.2% during 4Q12. Moreover the operating expenses for the reported quarter also increased 9.8% to $791.3 million as compared to $720.7 million during a year ago period. Net income for 4Q13 on a GAAP basis was reported at $65.3 million or $0.13 per share as compared to $222.3 million or $0.44 per share in 4Q12.

Adobe Systems Inc. (NASDAQ:ADBE) reported cash and investments balance of $3.17 billion at the end of 4Q13 compared to $3.16 billion at the end of 3Q13.

Future Outlook

Adobe Systems Inc. (NASDAQ:ADBE) expects FY14 revenue to remain flat as compared to FY13 and 1Q14 revenues to be in the range of $950 million to $1.0 billion. GAAP earnings for 1Q14 are anticipated to be in the range of $0.02-$0.08 per share.

About George Brook

George Brook covers money and politics for GDP Insider. George is a veteran journalist who has also covered Congress, national political conventions and presidential politics. George also covers the White House as well as economic and domestic policy for GDP insider. George's reporting has won numerous awards, including two Scripps Howard awards, two National Headliners, two Gerald Loeb Awards, as well as honors from Sigma Delta Chi and the National Press Club.

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