Investing.com — Adobe (NASDAQ:) raised its annual earnings steering after the Photoshop-maker posted better-than-expected second-quarter outcomes, sending shares within the California-based agency surging by over 14% in premarket buying and selling.
For the three months ended Could 31, Adobe reported adjusted earnings of $4.48 a share on income of $5.31 billion. Analysts polled by Investing.com had forecast $4.39 and $5.29 billion, respectively.
“Our highly differentiated approach to [artificial intelligence] and innovative product delivery are attracting an expanding universe of customers and providing more value to existing users,” mentioned CEO Shantanu Narayen in a press release.
Adobe has been pushing to develop its AI capabilities to entice clients, lots of whom are inventive professionals that use its merchandise like Premiere Professional and After Results. The hassle helped increase its quarterly web new digital media annual recurring income — a key top-line measure — above Wall Avenue expectations to $487 million.
Adobe is now predicting that full-year earnings per share can be between $18.00 and $18.20, whereas income is projected in a spread of $21.40 billion to $21.50 billion. It had beforehand forecast per-share revenue of $17.60 to $18.00 and income of $21.30 billion to $21.50 billion for its 2024 fiscal yr.
This is a take a look at how analysts are reacting to Adobe’s outcomes.
Analysts at JPMorgan raised their score of Adobe to “Overweight” from “Neutral,” saying: “We see numerous product catalysts building into the [second half] and beyond.”
Evercore ISI: “In aggregate, both the [second-quarter] results and upbeat [20]24 guidance helps create greater confidence in the durability of the Creative business and Adobe’s ability to infuse [generative] AI into its services and monetize the technology across the base.”
Morgan Stanley: “Against a backdrop of weak software prints generally in [the first quarter of the 2024 calendar year] and rising competitive concerns around Adobe specifically, a solid set of fundamentals should put wind back in [Adobe]’s sails.”
Citi: “It was a low bar, but [Adobe]’s [May quarter] results were perhaps the strongest we’ve seen in software this reporting season.”
Wolfe Analysis: “[Adobe] delivered the quarter we were looking (hoping) for, beating and raising across all key metrics. After a noisy [first quarter], we think [the second quarter] starts to quiet the doubters and ease concerns around competition, disruption, and saturation.”
Stifel: “With significant growth in influence within the front office over the last decade, we believe Adobe’s transition to a subscription-based, cloud delivery model in its core services – Creative Cloud, Document Cloud, and Experience Cloud – has provided an easier onboarding process and a more comprehensive platform that is attractive to enterprises shifting away from legacy solutions.”
BMO Capital Markets: “Adobe had a more upbeat tone on the economic environment and generative AI adoption than other areas of software.”
