(By Tim) Software developer, Adobe Systems, Inc. (NASDAQ: ADBE) is scheduled to report the company's 2nd quarter financial results on June 22, 2010. A conference call to discuss the results will be held on the same day after the market close.
Adobe Systems Incorporated is a provider of graphic design, publishing, and imaging software for Web and print production. It offers a market-leading line of application software products for creating, distributing, and managing information of all types. The company license its industry-standard technologies to major hardware manufacturers, software developers, and service providers, and offer integrated software solutions to businesses of all sizes.
The consensus estimate for the quarterly earnings is $0.44 per share on revenues of $905 million. These numbers are 20 and 28 percent better than the 2nd quarter of 2009 results of $0.35 and $704 million. The 26 analysts following Adobe have a very tight $0.40 to $0.44 spread on their earnings estimates.
Over the last four quarters, Adobe has been consistently meeting the consensus, reporting between 0 and 3 cents above the average from the analysts. The first quarter of 2010 was the biggest surprise of the last year when the 40¢ per share reported earnings beat the consensus of $0.37. Adobe management provides earnings and revenue guidance for the next quarter with their earnings reports. Management's earnings target for the 2nd quarter is 39¢ to 44¢ per share.
Two recent items are having an impact on investors' perception of Adobe Systems. The April launch and initial shipments of the flagship Creative Suite 5 software package should enhance revenues and the bottom line. CS3 was launched in April 2007 and CS4 in September of 2008 so the April of CS5 fits in with the usual timing for major updates to the software package.
The other major news story around Adobe has been the running debate/feud with Apple (NASD: AAPL) concerning the use of Adobe's Flash technology on Apple products. Apple is not allowing Flash on iPhones, iPods and iPads. Apple claims its reasons for banning Flash from Apple products are the proprietary nature of the Flash system and a lack of reliability and security from Flash. Apple uses these and a few other reasons to state that using Flash in software applications for the Apple products would result in substandard applications that do not meet Apple's and their customers' expectations.
Adobe has responded with open letters in the Wall Street Journal and on the major tech websites. Adobe CEO, Shantanu Narayen parried the points made by Steve Jobs in a letter concerning flash with his own sit-down interview with the WSJ. The bottom line remains that Adobe's Flash technology is currently banned from the very hot Apple mobile computing and communication products.
Adobe Systems should not have a problem meeting the quarterly earnings numbers. Company management set the goals and the Wall Street analysts repeated the same numbers. Market sentiment about the Apple/Adobe conflict is on the negative side concerning the value of Adobe's stock. Does Adobe need to be on Apple's hot products to generate growth or can revenues and income increase without having Flash on iPhones and iPads? That is the question for Adobe investors.
