Adobe Systems, Inc. Rises 8% on Q2 Earnings Surprise
Adobe Systems just reported results for the second quarter of fiscal year 2014. Shares rose more than 8% in after-market trading as the maker of creative software tools delivered stronger results than expected.
Analysts were looking for earnings of $0.30 per share on a cool $1 billion in total sales. Instead, Adobe delivered adjusted earnings of $0.37 per diluted share on $1.1 billion in sales.
Moreover, Adobe reported a deferred revenue balance of $928 million, up 5% from $881 million in the previous quarter. This rising balance reflects a growing stream of long-term license contracts, as Adobe moves deeper into its cloud-based licensing model.
"Our earnings performance in Q2 reflects the financial leverage we have in our model," said Adobe CFO Mark Garrett in a prepared statement. "With Adobe's Creative Cloud transformation behind us, our focus moving forward is to drive strong revenue and earnings growth with our market-leading cloud offerings."
Looking ahead, Adobe did not offer official guidance but CEO Shantanu Narayen offered this near-term view: "We're excited about our upcoming product pipeline and expect a strong second half of the year."
Coming into this report, Adobe shares had gained 58% in the previous 52 weeks. The stock's market momentum should continue on Wednesday, driven by this report.
The article Adobe Systems, Inc. Rises 8% on Q2 Earnings Surprise originally appeared on Fool.com.Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends Adobe Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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