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Adobe (ADBE) Promotes Murphy as New Chief Financial Officer

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Adobe Systems Inc. (ADBE - Free Report) recently announced that John Murphy will be taking up responsibilities as its executive vice president and Chief Financial Officer (CFO), effective Apr 9.

Murphy has succeeded Mark Garrett, who had announced his intent to retire earlier this year. The new CFO will report to Shantanu Narayen, Adobe’s president and CEO.

Murphy formerly worked as chief accounting officer and corporate controller at Adobe, and now has been promoted to CFO. His new responsibilities include taking care of important Business Operations and Pricing, Financial Planning and Analysis, Financial Reporting, Investor Relations, Internal Audit, Payroll, Procurement, SEC Reporting, Tax and Treasury functions.

Management believes that his experience in leadership, extensive background in financial planning, and operations and knowledge of the technology industry will be instrumental in helping the company achieve long-term goals.

The company’s shares have returned 68% in the past year compared with its industry’s rally of 28%.

Q1 Earnings Results & Guidance

Adobe delivered strong fiscal first-quarter 2018 results, wherein revenues of $2.08 billion were above the Zacks Consensus Estimate. Earnings of $1.55 per share were also ahead of the Zacks Consensus Estimate of $1.43. The growth was driven by strong demand for the company’s innovative solutions and products, strength across geographies, and growing subscriptions for its cloud application.

During the first quarter, the company acquired several new creative agreements and most of them included service offering that led to the solid growth of CC. Moreover, increasing net new subscriptions for CC will continue to benefit Adobe.

Additionally, the company is experiencing growing adoption of Acrobat and Adobe Sign, which is continuously contributing to the strong performance of Document Cloud (“DC”).

For the to-be-reported quarter, Adobe projects total revenues of $2.15 billion, in-line with the Zacks Consensus Estimate. Further, management expects GAAP and non-GAAP earnings of $1.16 and $1.53 per share, respectively.

To Conclude

Adobe Systems is one of the largest software companies in the world. Its massive customer base provides it with a distinct competitive edge. We remain optimistic about Adobe’s market position, compelling product lines, continued innovation, acquisitions and strong balance sheet.

The company is experiencing robust demand for its product offerings. New and innovative products like Adobe Character Animator, Spark, Lightroom CC, Dimension and XD are bringing in more customers. We expect the growth momentum in cloud to continue, which will expand Adobe’s market share by attracting new customers to its Creative Cloud business.

Zacks Rank &Stocks to Consider

Adobe carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the technology sector are Inc. (STMP - Free Report) , PetMed Express and Agilent Technologies (A - Free Report) . While sports a Zacks Rank #1 (Strong Buy), PetMed and Agilent carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings per share growth rate for, PetMed and Agilent is projected to be 15%, 10% and 11.2%, respectively.

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