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Tech stocks: Adobe Systems posts mixed results and steps up R&D spending

Posted By Scott Clayton On October 6, 2011 @ 1:30 pm In Tech Stocks | No Comments

Adobe Systems Ltd. [1], symbol ADBE on Nasdaq, makes software that lets computer users create, edit and share documents in the popular PDF format. As well, graphic designers use Adobe’s software to create print publications and web pages. The company also makes Adobe Flash, which lets web site developers make web pages more interactive by adding animation and video.

In its third quarter, which ended September 2, 2011, the tech stock’s earnings fell 15.2% to $195.1 million, or $0.39 a share. A year earlier, it earned $230.1 million, or $0.44 a share. Without one-time items, earnings per share would have risen 1.9%, to $0.55 from $0.54. That beat the consensus estimate of $0.54 a share.

Revenue rose 2.3%, to $1.01 billion from $990.3 million. That missed the consensus revenue estimate of $1.03 billion.

Tech stocks: Adobe spends more to adapt Flash technology to mobile devices

The company spent $181.0 million (or 17.9% of its revenue) on research in the latest quarter. That’s up 7.6% from $168.3 million (or 17.0% of revenue) a year earlier. The higher research spending should help Adobe to better adapt its Flash technology to mobile devices like smartphones and tablet computers. Right now, Apple and other mobile device makers prefer competing software that uses less power.

Adobe holds cash and investments of $2.7 billion, or $5.50 a share. The tech stock’s long-term debt of $1.5 billion is 12% of its market cap.

We updated our advice on Adobe in our September 23, 2011, Stock Pickers Digest hotline, which you can immediately view when you take a 1-month free trial to Stock Pickers Digest [2]. Click here to learn how you can start profiting from Stock Pickers Digest right away [3].

(Note: If you are a current Stock Pickers Digest subscriber, please click here to view Pat’s recommendation [4]. Be sure to log in first.)


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URLs in this post:

[1] Adobe Systems Ltd.: http://www.adobe.com/aboutadobe/invrelations/

[2] Stock Pickers Digest: http://www.tsinetwork.ca/publications/stock-pickers-digest/

[3] Click here to learn how you can start profiting from Stock Pickers Digest right away: http://www.tsinetwork.ca/publications/choose-newsletter-publication-format/?product_id=617

[4] click here to view Pat’s recommendation: http://www.tsinetwork.ca/hotline-back-issues/stock-pickers-digest-hotline-back-issues/stock-pickers-digest-hotline-friday-september-23-2011/

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