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Adobe's (ADBE) Q4 Earnings to Top on Creative Cloud Strength
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Adobe Systems Inc. (ADBE - Free Report) is set to report fourth-quarter fiscal 2017 results on Dec 14. Last quarter, the software giant delivered a positive earnings surprise of 10%.
The surprise history has been strong in Adobe’s case. The company surpassed estimates in each of the trailing four quarters, with an average positive surprise of 7.80%.
On a year-to-date basis, the company’s shares have returned 68.6% compared with the industry’s rally of 35.3%.
Strength in Digital Media Business
Revenues from Digital Media Solutions surged 28% year over year to $1.27 billion in the last reported quarter. Total Digital Media ARR (Annualized Recurring Revenues) totaled $4.87 billion. For the upcoming quarter, total Digital Media ARR is expected at $5.19 billion, driven by strong growth in the Creative Cloud and Document Cloud business lines.
The segment comprises Creative Cloud (CC) and Document Cloud (DC). In the last quarter, Creative ARR increased $272 million to $4.32 billion and Creative revenues totaled $1.06 billion, up 33% year over year. Creative ARR is projected at $4.60 billion, driven by net-new subscriptions, adoption of enterprise services and focus on high-potential segments like education. Also CC revenues for the upcoming quarter are expected to be $1.14 billion.
Also, DC ARR is expected to increase to $594 million in the upcoming quarter, driven by Adobe Sign, which is now Microsoft’s preferred e-signature solution across the company’s portfolio.
Strength in Digital Marketing Business
Within the Digital Marketing segment, Adobe Experience Cloud revenues were up 26% year over year to $508 million. Adobe Experience Cloud includes Adobe Marketing Cloud, Adobe Analytics Cloud and Adobe Advertising Cloud. For the upcoming quarter, Adobe Marketing Cloud is expected at $547 million, up from $495 million in the prior quarter. The new capabilities in Adobe Target will further enhance customer recommendations and targeting, optimize experiences and automate the delivery of personalized offers.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has along with a positive Earnings ESP has a good chance of beating estimates. Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.
Adobehas a Zacks Rank #1 and an Earnings ESP of +0.97%, indicating a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
PayPal Holdings, Inc (PYPL - Free Report) has an Earnings ESP of +0.28% and Zacks Rank #3.
Apple Inc. (AAPL - Free Report) has an Earnings ESP of +1.28% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Adobe's (ADBE) Q4 Earnings to Top on Creative Cloud Strength
Adobe Systems Inc. (ADBE - Free Report) is set to report fourth-quarter fiscal 2017 results on Dec 14. Last quarter, the software giant delivered a positive earnings surprise of 10%.
The surprise history has been strong in Adobe’s case. The company surpassed estimates in each of the trailing four quarters, with an average positive surprise of 7.80%.
On a year-to-date basis, the company’s shares have returned 68.6% compared with the industry’s rally of 35.3%.
Strength in Digital Media Business
Revenues from Digital Media Solutions surged 28% year over year to $1.27 billion in the last reported quarter. Total Digital Media ARR (Annualized Recurring Revenues) totaled $4.87 billion. For the upcoming quarter, total Digital Media ARR is expected at $5.19 billion, driven by strong growth in the Creative Cloud and Document Cloud business lines.
The segment comprises Creative Cloud (CC) and Document Cloud (DC). In the last quarter, Creative ARR increased $272 million to $4.32 billion and Creative revenues totaled $1.06 billion, up 33% year over year. Creative ARR is projected at $4.60 billion, driven by net-new subscriptions, adoption of enterprise services and focus on high-potential segments like education. Also CC revenues for the upcoming quarter are expected to be $1.14 billion.
Also, DC ARR is expected to increase to $594 million in the upcoming quarter, driven by Adobe Sign, which is now Microsoft’s preferred e-signature solution across the company’s portfolio.
Strength in Digital Marketing Business
Within the Digital Marketing segment, Adobe Experience Cloud revenues were up 26% year over year to $508 million. Adobe Experience Cloud includes Adobe Marketing Cloud, Adobe Analytics Cloud and Adobe Advertising Cloud. For the upcoming quarter, Adobe Marketing Cloud is expected at $547 million, up from $495 million in the prior quarter. The new capabilities in Adobe Target will further enhance customer recommendations and targeting, optimize experiences and automate the delivery of personalized offers.
What Our Model Says
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or #3 (Hold) has along with a positive Earnings ESP has a good chance of beating estimates. Sell-rated stocks (Zacks Rank #4 or #5) are best avoided.
Adobehas a Zacks Rank #1 and an Earnings ESP of +0.97%, indicating a likely positive surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Adobe Systems Incorporated Price and EPS Surprise
Adobe Systems Incorporated Price and EPS Surprise | Adobe Systems Incorporated Quote
Stocks to Consider
You could also consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank:
Callidus Software Inc. has an Earnings ESP of +11.34% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
PayPal Holdings, Inc (PYPL - Free Report) has an Earnings ESP of +0.28% and Zacks Rank #3.
Apple Inc. (AAPL - Free Report) has an Earnings ESP of +1.28% and a Zacks Rank #3.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>