After a period when it appeared they would accelerate their recent rally to end the week, U.S. stocks pared their gains on Friday following word that President Trump is moving to impose $200 billion in fresh tariffs on Chinese goods. That news dashed earlier hopes stemming from reports that the U.S. was proposing a new round of trade talks with China that could have eased tensions.
Today's stock market
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DATA SOURCE: YAHOO! FINANCE.
Oil stocks enjoyed another solid session, leaving the SPDR S&P Oil & Gas Exploration & Production ETF (NYSEMKT: XOP) up 0.5%. But consumer goods stocks led the day's decliners, and the Consumer Staples Select Sector SPDR ETF (NYSEMKT: XLP) fell by as much as 0.8% before closing down just 0.3%.
Among individual stocks, earnings news helped both Adobe Systems (NASDAQ: ADBE) and Dave & Buster's (NASDAQ: PLAY) resist the broader market's headwinds.
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Adobe renders another quarterly beat
Shares of Adobe Systems climbed 2.3% Friday to a new all-time high after the creative software leader delivered record fiscal third-quarter 2018 results. Quarterly revenue rose 24.4% year over year to $2.291 billion, while adjusted earnings grew more than 57% to $860 million, or $1.73 per share. Both figures landed above Adobe's most recent guidance, which called for earnings of $1.68 per share on revenue of $2.24 billion.
Perhaps most impressive, 90% of Adobe's revenue came from recurring sources, a metric driven by the company's shift in recent years away from perpetual licenses and toward a cloud-based subscription model. To be sure, Adobe's Digital media annualized recurring revenue grew by $339 million from last quarter to $6.4 billion.
If that wasn't enough, Adobe told investors to expect fiscal fourth-quarter adjusted earnings of $1.87 per share on revenue of $2.42 billion. Here again, both figures were slightly above analysts' consensus estimates.
Dave & Buster's Earnings
Dave & Buster's touched a 52-week high today before slipping back to a 7.9% gain, driven by the restaurant and entertainment chain's delicious fiscal second-quarter report.
More specifically, Dave & Buster's recorded earnings of $33.8 million, or $0.84 per diluted share, while revenue climbed 13.7% year over year (or 11.4% on a comparable-week basis) to $319.2 million. Still, its top-line growth was driven entirely by new locations, as comparable-store sales declined 2.4%. But that metric also marked a notable improvement from a 4.9% comps decline last quarter. What's more, most analysts watching the stock were only modeling for earnings of $0.67 per share on revenue of $315.3 million.
"We delivered meaningful sequential improvement in comparable store sales and double-digit revenue growth during the second quarter," said CEO Brian Jenkins. "We are pleased with the strong guest response to our proprietary VR platform and look forward to building on this momentum."
In the meantime, Dave & Buster's now expects fiscal 2018 revenue in the range of $1.230 billion to $1.255 billion (up from a forecast of $1.200 billion to $1.240 billion before), assuming a low-single-digit decrease in comparable-store sales (up from prior expectations for a low- to mid-single-digit decline). The company also raised both ends of its full-year net income target range by $6 million, for new a earnings guidance range of $101 million to $111 million.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Adobe Systems. The Motley Fool recommends Dave & Buster's Entertainment. The Motley Fool has a disclosure policy.