Adobe Tops Earnings Estimates on Digital Media Strength

Adobe reported its latest results after the bell Tuesday.
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Adobe Inc.  (ADBE) - Get Report posted better-than-expected results for its fiscal third-quarter after the bell on Tuesday and offered upbeat guidance for the fourth quarter.

The company reported revenue of $3.23 billion, up 14% over the same period a year ago. Diluted earnings per share were $2.57 on a non-GAAP basis.

Adobe had been expected to report sales of $3.2 billion and adjusted earnings of $2.41 a share, based on a FactSet survey of 24 analysts.

In the same period a year ago, the company posted earnings of $2.05 a share on sales of $2.8 billion. It reported net income of $632.6 million.

“Adobe delivered the best Q3 in our history” Shantanu Narayen, Adobe's president and CEO, said in a statement. “We are confident that our leadership in the creative, document and customer experience management categories will drive continued momentum in 2020 and beyond.”

The company said its results were helped by a 19% rise in its Digital Media segment revenue to $2.34 billion.

For the fiscal fourth quarter, the company forecast revenue will rise to $3.35 billion while non-GAAP earnings per share are seen hitting $2.64. 

Adobe said it expects digital media segment revenue to climb 18% in the fourth quarter from a year ago. In addition, it expects to see net new annualized recurring revenue (ARR) of about $540 million.

The company said it repurchased approximately 1.5 million shares during the fiscal third quarter.

Adobe shares were active in the after-hours session. The stock gained $13.09, or  2.63%, to $510.76 in late action. in the regular session, shares rose 2.4%.

For the year, Adobe shares have gained about 50%.