Adobe rises on stronger 2Q results

Adobe rises aftermarket as cloud-based business gains strength in company's 2nd quarter

Associated Press

NEW YORK (AP) -- Shares of Adobe Systems climbed in aftermarket trading as the company's subscription-based business grew and its second-quarter results surpassed Wall Street expectations.

The San Jose, California, company known for Photoshop, Illustrator and Acrobat now gets a majority of its revenue from its cloud-based software and subscriptions instead of physical products.

At the end of May Adobe had 2.3 million paid Creative Cloud subscriptions, up 464,000 from three months ago. The company said revenue from its Adobe Marketing Cloud business also increased.

Its net income rose 16 percent, to $88.5 million, or 17 cents per share, in the three months through May 30, from $76.5 million, or 15 cents per share, the year before. Excluding one-time items, profit was 37 cents per share. Revenue grew 6 percent, to $1.07 billion from $1.01 billion.

Analysts were expecting net income of 30 cents per share and $1.03 billion in revenue, according to FactSet.

For the current quarter, Adobe expects profit of 22 to 28 cents per share, excluding one-time charges, on revenue of $975 million to $1.03 billion. Analysts predicted 27 cents per share on $1.02 billion.

Adobe Systems Inc. stock added $5.86, or 8.7 percent, to $73.40 aftermarket after slipping 8 cents to close at $67.54 on Tuesday.

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