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Adobe Systems (ADBE) 4Q Earnings Up 28 Pct; Guides 1Q Below Street

 December 13, 2012 04:31 PM

(By Balaseshan) Adobe Systems Inc. (NASDAQ: ADBE) reported a 28% jump in quarterly earnings on strong creative cloud and marketing cloud adoption. However, the company guided first quarter and full year 2013 below Street's view.

Earnings for the fourth quarter were $222.33 million or $0.44 per share, compared to $173.72 million or $0.35 per share last year. Adjusted earnings per share (EPS) declined to $0.61 from $0.67.

Revenue marginally rose 0.1% to $1.153 billion, due to lower products revenue offsetting increase subscription, and services and support revenues.

Analysts, on average, polled by Thomson Reuters had expected a profit of $0.57 per share on revenue of $1.10 billion for the fourth quarter.

Total operating expenses fell nearly 9 percent.

[Related -Adobe Systems Incorporated (NASDAQ:ADBE): How Q4 Earnings Will Fare?]

During the quarter, the company continued to accelerate adoption of Adobe creative cloud as it migrates to a subscription model. Adobe also achieved record Adobe marketing cloud and document services revenue during the fourth quarter.

Products revenue fell to $852.84 million from $931.90 million, while subscription revenue grew to $194.54 million from $128.44 million. Services and support revenue rose to $106.05 million from $91.83 million.

Adobe added about 132,000 Creative Cloud paid subscriptions in the fourth quarter. Adobe added about 10,000 Creative Cloud subscriptions per week during the quarter, versus the addition of 8,000 subscriptions per week in the third quarter.

[Related -Adobe Systems Inc. (ADBE) Q3 Earnings Preview: A Big Quarter On The Way?]

Looking ahead into the first quarter, the company expects adjusted earnings of $0.26 to $0.32 per share and revenue of $950 million to $1 billion, while Street analysts predict profit of $0.56 per share on revenue of $1.07 billion.

For the fiscal 2013, the company projects adjusted earnings of about $1.40 and revenue of about $4.1 billion, while Street predicts profit of $2.35 per share on revenue of $4.48 billion.

ADBE closed Thursday's regular session down 1.19% at $35.53. The stock has been trading between $26.25 and $36.50 for the past 52 weeks.

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