Adobe late Thursday beat Wall Street's targets for its fiscal second quarter. It also raised its full-year outlook for sales and earnings. But Adobe stock wavered in extended trading.
The digital media and marketing software firm earned an adjusted $5.06 a share on sales of $5.87 billion in the quarter ended May 30. Analysts polled by FactSet had expected Adobe to earn $4.97 a share on sales of $5.8 billion. On a year-over-year basis, Adobe earnings rose 13% while sales increased 11%.
For the current quarter, its fiscal Q3, Adobe expects to earn an adjusted $5.18 a share on sales of $5.9 billion. That's based on the midpoint of its guidance. Analysts had been modeling earnings of $5.11 a share on sales of $5.88 billion. In the same quarter last year, Adobe earned an adjusted $4.65 a share on sales of $5.41 billion.
For its fiscal 2025, the San Jose, Calif.-based company now expects to earn an adjusted $20.60 a share on sales of $23.55 billion, based on the midpoint of its outlook. That would translate to year-over-year growth of 12% in earnings and 10% in revenue. Adobe previously forecast earnings per share of $20.35 on sales of $23.43 billion.
In after-hours trading on the stock market today, Adobe stock traded sideways, last down a fraction at 411.65. During the regular session Thursday, Adobe stock climbed 0.2% to close at 413.68.
'Negative Sentiment' For Adobe Stock
Heading into the earnings report, Adobe stock faced "very negative investor sentiment," Mizuho Securities analyst Gregg Moskowitz said in a report Sunday. "Adobe has been a frustrating stock for most of the last 12 months."
"Having said that, Adobe is beginning to meaningfully monetize its generative AI innovations (and) an upcoming price increase should be nicely additive," Moskowitz said. He rates Adobe stock as outperform with a price target of 575.
Adobe has added generative artificial intelligence technology to its many products, including Acrobat, Photoshop and more.
"Adobe's AI innovation is transforming industries enabling individuals and enterprises to achieve unprecedented levels of creativity," Adobe Chief Executive Shantanu Narayen said in a news release.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
