Adobe (ADBE) Q4 Sales Up 14%, Profit Jumps 20%; Guides Q1, FY12

December 15, 2011 5:03 PM EST
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Adobe Systems Incorporated (Nasdaq: ADBE) Thursday reported financial results for its fourth quarter ended Dec. 2, 2011. Shares of Adobe are trading up 3.4 percent following the release.

Revenue was $1.152 billion, exceeding the company’s target range of $1.075 billion to $1.125 billion, and up 14 percent on a year-over-year basis. The Street was estimating total sales of $1.09 billion.

Gross profit for the quarter totaled $1.035 billion, a 15 percent increase from the same quarter last year. The total cost of revenue rose 8.5 percent to $116.4 million.

GAAP operating income was $246.1 million, operating margin was 21.4 percent and net income was $173.7 million. On a non-GAAP basis, operating income was $444.5 million, operating margin was 38.6 percent and net income was $332.6 million.

Unadjusted diluted earnings per share were $0.35, or $0.67 per share on a pro-forma basis. The Street was forecasting earnings of $0.60 per share for the quarter. The non-GAAP figure was up 19.6 percent from EPS of 56 cents in the year-ago quarter.

The company earned $496.8 million in cash flow from operations during the quarter.

Looking ahead, Adobe estimates revenue of $1.025 billion to $1.075 billion for the first quarter, inline with the Street consensus of $1.05 billion. On a diluted earnings per share basis, the company is targeting a range of $0.37 to $0.43 on a GAAP basis, and $0.54 to $0.59 on a non-GAAP basis, also inline with the Street’s consensus of $0.58 per share.

For fiscal year 2012, Adobe continues to target annual revenue growth of four to six percent. The company is targeting GAAP EPS in the range of $1.70 to $1.83 adjusted earnings of $2.37 to $2.47 per share. The Street is forecasting earnings of $2.44 per share on $4.35 billion in total sales for fiscal 2012.

“Adobe’s record results in Q4 and fiscal 2011 were driven by strong performance in our digital media and digital marketing businesses,” said Shantanu Narayen, president and CEO of Adobe. “We intend to be the market leader in these two large categories, which will drive strong revenue and earnings growth.”

“Our outstanding Q4 finish enabled Adobe to beat the annual revenue growth target we provided at the outset of the year,” said Mark Garrett, executive vice president and CFO of Adobe. “We also drove $1.5 billion in cash flow during the year, and grew annual non-GAAP earnings per share by 22 percent.”

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