Adobe stock (NYSE: ADBE) stock is trading higher in US premarket price action today after the company reported better-than-expected earnings in its fiscal fourth quarter of 2022. US stock futures meanwhile point to a weak opening.

Adobe posted revenues of $4.53 billion in the quarter. The revenues were in line with estimates and increased 10% YoY. In constant currency terms, the company’s revenues increased by 14%. A stronger US dollar has been a headwind for US multinational companies.

Looking at the full fiscal year, Adobe posted revenues of $17.61 billion which was 12% higher YoY and a new record for the company. Adobe’s operating income also rose to a record high in the fiscal year that ended on December 2.

Commenting on the performance, Adobe CEO Shantanu Narayen said, “Our market opportunity, unparalleled innovation, operational rigor and exceptional talent position us well to drive our next decade of growth.”

In the fiscal year, Adobe generated a record operating cash flow of $7.84 billion. The fiscal fourth quarter operating cash flow of $2.33 billion was also a record. In the fiscal fourth quarter, the company repurchased 5 million shares which took the full year repurchases to 15.7 million shares.

US tech companies tend to spend generously on stock buybacks but are frugal with dividends. Adobe does not pay dividends at all. There is however a list of stocks with high dividend yields.

Adobe Posted Better Than Expected Earnings, Stock Rises

While Adobe’s revenues were in line with estimates, the company’s adjusted EPS of $3.60 was ahead of the $3.50 that analysts were expecting. The company also maintained its guidance for the fiscal year 2023 and forecasted sales between $19.1-$19.3 billion.

It forecast the Digital Media segment’s revenues to be between $13.9-$14 billion and the Digital Experience segment’s revenues to be between $4.925-$5.025 billion. It called for an adjusted EPS between $15.15-$15.45. The guidance was generally in line with what markets were expecting.

In his remarks, Adobe CFO Dan Durn said, “Strong demand for our offerings, industry-leading innovation and track record of top- and bottom-line growth set us up to capture the massive opportunities in 2023 and beyond.”

Adobe Announced the Acquisition of Figma

Earlier this year, Adobe announced the acquisition of the web-based collaborative design platform Figma for $20 billion. The transaction is yet to be completed. While the deal’s valuation looked high, analysts believe that the acquisition would help strengthen the company’s leading market position. We have a guide on how to buy Adobe stock.

Meanwhile, during their earnings call, Adobe expressed optimism over the regulatory process of the acquisition. David Wadhwani, Adobe’s president of digital media said, “We continue to feel positive about the facts underlying the transaction and expect to receive approval to close the transaction in 2023.”

US Stock Markets Crash, Analysts See More Pain Ahead

While Adobe’s business has been strong, during the earnings call it admitted that it is not immune to the macroeconomic headwinds. US stocks have tumbled this week as Fed chair Jerome Powell made hawkish comments after the December FOMC meeting.

The Fed dashed hopes of a Santa Claus rally in US stocks by hiking rates by 50-basis points and predicting more rate hikes in 2023. Several Wall Street analysts now expect markets to fall even further amid recession fears.

Meanwhile, at least for today, Adobe seems to dodge the impact of the wider market sell-off and is in the green in premarkets.

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