Adobe Systems Inc. (NASDAQ:
ADBE) is scheduled to release its Q2 2010 results after the market closes on June 22, 2010. For the Q2 of fiscal 2010, Adobe is targeting revenue of $875 million to $925 million. The Company's operating margin is targeted to be 21.0% to 24.5% on a GAAP basis, and 33.5% to 35.5% on a non-GAAP basis. In addition, the Company is targeting its share count to be between 531 million and 535 million shares, and it is targeting non-operating expense between $16 million and $18 million. Adobe's GAAP and non-GAAP tax rate is expected to be approximately 25%. These targets lead to a second quarter diluted EPS target range of $0.23 to $0.30 on a GAAP basis, and an EPS target range of $0.39 to $0.44 on a non-GAAP basis.
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.
As for the Q1 of 2010, Adobe achieved revenue of $858.7 million, compared to $786.4 million reported for Q1 of fiscal 2009 and $757.3 million reported in the Q4 of fiscal 2009. This represents 9% Y-o-Y revenue growth. GAAP operating income was $176.8 million in the Q1 of fiscal 2010, compared to $207.9 million in the Q1 of fiscal 2009 and $153.6 million in the Q4 of fiscal 2009.GAAP net income was $127.2 million for the Q1 of fiscal 2010, compared to GAAP net income of $156.4 million reported in the Q1 of fiscal 2009 and GAAP net loss of $32.0 million in the Q4 of fiscal 2009. Non-GAAP net income was $211.7 million for the Q1 of fiscal 2010, compared to $236.8 million in the Q1 of fiscal 2009 and $206.8 million in the Q4 of fiscal 2009.
Analysts' estimates for Q2 2010 range from a low of $0.30 to a high of $0.44, compared to a consensus estimate of $0.42, with number of estimates being 22 and the co-efficient variance 6.62. Q2 checks suggest that CS5 is off to a good start, with stronger momentum expected later this year as customers plan to upgrade to CS5 in conjunction with a PC refresh and Win 7 adoption. CS5 interest is well ahead of CS4, with interest being in line with or better than CS3. Acrobat and LiveCycle have also improved, while ADBE entered Q2 with backlog equal to 6% of Q1 rev. Net, ADBE should meet or exceed cons. of $906M and $0.42, and a solid Q/guide should refocus investors on fundamentals and drive the stock higher. The ADBE merger seems to have boosted OMTR's profile, and core OMTR transactions have accelerated. Ties to CS5 should also help generate additional demand for OMTR. ADBE's revenue is likely to see a YoY benefit from exchange rate fluctuations of about 1.7% in Q2, slightly less than the benefit last quarter but still solidly positive. The Euro is expected to decline to $1.16 by the end of CY10, which could cause FX to become a headwind for many technology companies in the second half of the year. However, ADBE is better insulated than most given the company's revenue hedges. Creative solutions is expected to bring in a revenue of $475 million, Business Productivity $250 million, Platform $47 million, Print & Publishing $47 million and Omniture $87 million. Non- GAAP operating profit is likely to be $314 million, resulting in an EPS (Non-GAAP) of $0.42.
The stock closed at $33.52, up +1.21% on June 18, 2010 and most analysts' rate the stock as a relative Overweight with an average price target of $42.50.
