Digital media and marketing software maker Adobe (ADBE) late Tuesday beat Wall Street’s targets for its fiscal third quarter. Its guidance for the current quarter was in line with analyst estimates on earnings but a tad light on sales. The Adobe earnings news sent ADBE stock higher in extended trading.
The San Jose, Calif.-based company earned an adjusted $2.57 a share on sales of $3.23 billion in the quarter ended Aug. 28. Analysts expected Adobe earnings of $2.41 a share on sales of $3.16 billion. On a year-over-year basis, Adobe earnings rose 25% while sales climbed 14%.
Adobe’s Digital Media segment saw sales climb 19% year over year to $2.34 billion. Within the segment, Creative Cloud revenue rose 19% to $1.96 billion while Document Cloud sales grew 22% to $375 million.
Meanwhile, the company’s Digital Experience segment saw revenue increase just 2% to $838 million in the quarter.
Record Results Despite Challenging Environment
Adobe has gotten a lift from the work-from-home trend during the coronavirus pandemic as users rely on its cloud computing products. Those products include software for creative professionals and paperless document workflows.
“Adobe delivered the best Q3 in our history in a challenging macroeconomic environment, demonstrating the global demand for our innovative solutions,” Chief Executive Shantanu Narayen said in the Adobe earnings news release.
He added, “We are confident that our leadership in the creative, document and customer experience management categories will drive continued momentum in 2020 and beyond.”
In after-hours trading on the stock market today, ADBE stock rose 2.3%, near 508.90. During the regular session, ahead of the Adobe earnings news, ADBE stock climbed 2.4% to 497.67.
Adobe Earnings Outlook Matches Views
For the current quarter, Adobe expects to earn an adjusted $2.64 a share on sales of $3.35 billion. Analysts predicted Adobe earnings of $2.64 a share on sales of $3.36 billion in the November-ending quarter. In the year-earlier period, Adobe earnings were $2.29 a share on sales of $2.99 billion.
ADBE Stock Trading Near Buy Zone
On Aug. 20, ADBE stock broke out of a second-stage flat base at a buy point of 470.71, according to IBD MarketSmith charts. It hit an all-time high of 536.88 on Sept. 2 before dropping during the sell-off of tech stocks earlier this month. It found support at its 50-day moving average line and has been trading in and out of the 5% chase zone of its breakout.
To find the best stocks to buy or watch, check out IBD Stock Lists. Also consult IBD’s Leaderboard, MarketSmith and SwingTrader platforms. Beginning investors should visit the IBD University to get started.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MAY ALSO LIKE: