Adobe Q1 earnings narrowly match Wall Street predictions

Just as with the last quarter, Adobe CEO and president Shantanu Narayen commented about Adobe's continued focus on digital media and marketing.

After turning out solid earnings for the fourth quarter of 2011, expectations were high for Adobe. The digital creative solutions company didn't entirely disappoint on Monday as it just about exactly matched Wall Street expectations.

Adobe reported a first quarter net income of $185.2 million, or 37 cents a share (statement). Non-GAAP earnings were 57 cents a share on a revenue of $1.045 billion.

Wall Street was expecting Adobe to report first quarter earnings of 57 cents a share on revenue of $1.05 billion.

Just as with the last quarter, Adobe CEO and president Shantanu Narayen commented in prepared remarks about Adobe's continued focus toward digital media:

Our strategy is to be the leader in Digital Media and Digital Marketing. With the upcoming release of our Creative Suite and Creative Cloud offerings, and with the momentum we have in Digital Marketing, we remain confident about our ability to drive strong revenue and earnings growth.

Chief financial officer Mark Garrett added that Adobe is raising its fiscal year revenue and non-GAAP earnings growth targets due to the addition of online performance marketing business Efficient Frontier.

The aforementioned $1.045 billion revenue result included $9.6 million of revenue from the acquisition of Efficient Frontier, which closed in January 2012.

For the outlook, Adobe is predicting a revenue of $1.090 billion to $1.140 billion at the end of Q2 2012 with non-GAAP earnings between 57 to 61 cents a share.

For 2012 overall, Adobe is targeting an annual revenue growth rate within the range of six to eight percent, versus its prior target range of four to six percent. That also includes the prediction of non-GAAP earnings between $2.38 and $2.48.

By the numbers:

  • Cash flow from operations was $314.4 million.
  • Operating income was $289.0 million on a GAAP basis and $386.7 million on a non-GAAP basis.
  • Adobe is predicting its Q2 share count to total between 502 million and 504 million shares.