Adobe Q2 Profit Rises - Update

(RTTNews) - Enterprise software maker Adobe Systems Inc. (ADBE), Tuesday reported a jump in second-quarter profit driven largely by a 20 percent increase in revenues. The photoshop maker's earnings topped Wall Street estimates, while revenues came in line. Nevertheless, Adobe shares fell a near 5 percent in after-hours trade.

San Jose, California-based Adobe's second-quarter profit rose to $244.1 million or $0.48 per share from $147.5 million or $0.29 per share last year.

Adjusted earnings for the quarter rose to $0.71 per share from $0.48 per share last year. On average, 22 analysts polled by Thomson Reuters expected earnings of $0.68 per share for the quarter. Analysts' estimates typically exclude special items.

Adobe said its revenue for the quarter rose 20 percent to $1.40 billion from $1.16 billion last year. Analysts had a consensus revenue estimate of $1.40 billion for the quarter.

Digital Media segment revenue grew by 26 percent year-over-year to $943 million, with Creative revenue growing 37 percent year-over-year to $755 million.

CFO Mark Garrett said, "Based on our first half performance and momentum, we're on track to meet or exceed all of our annual fiscal year 2016 targets."

Adobe has been focusing on cloud based subscriptions to boost revenue. Its Creative Cloud software as a service offering gives users access to a range of its software, for a monthly or annual subscription. Customers prefer the cloud route instead of buying individual products and software suites for a licensee fee.

ADBE closed Tuesday's trading at $99.72, up $1.73 or 1.77%, on the Nasdaq. The stock further dropped $4.71 or 4.72% in the after-hours trade.