The Season Starts Again With Adobe Systems

Adobe Systems

Q2 Revenue Est.:  887.74 Mil

Q2 EPS Est.:  $0.43

NOTE:  Adobe will report Q2 earnings after the market close on Tuesday, June 22.

Q2 INCOME STATEMENT
Three Months Ended May 28, 2010
Revenue	$887,737
Cost of Revenue:
Products	$70,310
Services & Support	$20,289
Total Revenue	$90,599
Gross Profit	$797,138
Operating Expenses:
R&D	$173,265
S&M	$302,613
G&A	$92,931
Restructuring	$13,955
Amortization	$20,974
Total Oper. Ex.	$603,739
Operating Income	$193,399
NO Income:
Int & Other	$5,734
Int Ex.	-$2,403
Investments	-$856
Total NO Income	$2,475
Income before Taxes	$195,874
Provision for Inc. Tax	$45,541
Net Income	$150,333
NON-GAAP Adj.
Stock-based Comp.	$55,514
Restructuring	$13,955
Amortization	$37,062
Investment losses	$856
Inc. Tax Adj.	-$28,275
NON-GAAP NI	$229,446
Diluted EPS	$0.43

Analysts are currently forecasting a second quarter revenue figure of $905.51M with EPS of $0.43.  My estimates are slightly less optimistic when it comes to top-line growth; however, I am more optimistic on the company’s ability to generate earnings, which explains why my EPS figure is the same as consensus.

I will not be giving a Trading Recommendation for Adobe Systems (“ADBE”) this quarter.  While I am predicting that Q2 revenue will come in below analysts’ consensus, I do not believe that it will be enough to drag the stock down a significant amount.  Relative to past earnings reports, the stock’s volatility Tuesday and Wednesday should not be too dramatic.  

Trading Recommendation:  None

ADBE Ownership

Author:   NO

Author’s Family:  NO

Disclaimer:
· Opinions, estimates and projections contained in this report are of the author as of the date published and are subject to change without notice.
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· It is important to do your own due diligence on any position you enter.