Adobe (ADBE 235.91, -12.17, -4.91%) opened lower by almost 3% after the
company reported fourth quarter results.
The software company delivered earnings of $1.87 per share, which was just shy of market expectations. Excluding the impact of the Marketo acquisition, Adobe earned $1.90 per share. Revenue grew 20.6% year/year to $2.42 bln, which was also just below estimates.
Today's pre-market decline pressured the stock beneath the confluence of its 50-day (243.98) and 200-day (243.88) moving averages. This comes after shares notched a record high at 277.61 in mid-September.
Adobe's quarterly and annual revenues hit their respective records, but this represents a continuation of a long-established trend, which has been reflected in the steady rise of the price of shares over the past several years. The company believes that strategic acquisitions, like that of Marketo, will support continued strong growth in earnings and revenue.
The company issued guidance for the first quarter and for fiscal year 2019, but the outlook may not compare to market estimates due to the company’s acquisition of Marketo, which took place at the end of October. Adobe expects first quarter earnings of $1.60 per share on revenue of $2.54 bln. This forecast assumes 20% revenue growth in the digital media segment, 31% growth in the digital experience segment, and roughly $330 mln in net new digital media annualized recurring revenue.
For fiscal 2019, Adobe expects earnings of $7.75 per share while revenue is expected to reach $11.15 bln. The company expects that revenue in the digital media segment will continue growing at 20% while digital experience revenue is expected to grow 34%, up from the previous outlook for growth of 20% due to the acquisition of Marketo. The company expects that net new digital media annualized revenue will total roughly $1.45 bln. Digital media subscription bookings are expected to increase 25%.
- OUR VIEW
- LEARNING CENTER