Adobe (ADBE) to Report Q3 Earnings: What's in the Offing?
Adobe Inc. ADBE is set to report third-quarter fiscal 2022 results on Sep 15.
For the fiscal third quarter, the company expects non-GAAP earnings of $3.33 per share. The Zacks Consensus Estimate for earnings is pegged at $3.33 per share, indicating growth of 7.1% from the year-ago reported figure.
Adobe projects total revenues of $4.43 billion. The consensus mark for the same is pegged at $4.43 billion, implying growth of 12.7% from the year-ago reported figure.
The company surpassed the Zacks Consensus Estimate in the trailing four quarters, the earnings surprise being 1.68%, on average.
Adobe Inc. Price and EPS Surprise
Adobe Inc. price-eps-surprise | Adobe Inc. Quote
Factors to Consider
Solid momentum across Digital Media and Digital Experience segments is likely to have driven top-line growth for the company in the to-be-reported quarter.
Robust Creative Cloud and Document Cloud are expected to have contributed well to the performance of the Digital Media segment in the fiscal third quarter. Adobe expects Digital Media revenues to grow 13% year over year for the fiscal first quarter.
The growing adoption of Premiere Pro, solid momentum across the Adobe Express platform and benefits from the Frame.io acquisition are expected to have accelerated growth in Creative revenues in the quarter under review.
Solid momentum across the Document Cloud enterprise business and strength in the Acrobat ecosystem are anticipated to have contributed well to the Document Cloud revenues. The growing momentum in PDFs on Acrobat Mobile is expected to have been another positive.
Growing Adobe Experience Cloud subscription on the heels of the rising adoption of Adobe Marketing Cloud, Adobe Analytics Cloud and Adobe Advertising Cloud is expected to have benefited Adobe’s Digital Experience segment in the quarter under review.
Rising demand for professional service, the strengthening momentum of Experience Cloud in the healthcare industry and the growing adoption of Adobe Experience Manager are likely to have contributed well.
The company anticipates Digital Experience revenues to grow 12% on a year-over-year basis. Digital Experience subscription revenues are likely to increase 13% year over year.
However, the ongoing tensions between Russia and Ukraine due to which Adobe halted its sales of products and services in Russia and Belarus are expected to have created major headwinds in the fiscal third quarter.
Unfavorable foreign exchange fluctuations and summer seasonality are likely to have impacted the quarterly performance negatively.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Adobe this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Adobe has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell).
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Arista Networks ANET currently sports a Zacks Rank #1 and an Earnings ESP of +1.36%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for ANET’s third-quarter 2022 earnings is pegged at $1.05 per share, indicating a 41.9% rise from the year-ago quarter’s reported number.
Cadence Design Systems CDNS has an Earnings ESP of +0.41% and a Zacks Rank #1 at present.
The Zacks Consensus Estimate for CDNS’s third-quarter 2022 earnings is pegged at 97 cents per share, suggesting an increase of 21.2% from the prior-year quarter’s reported figure.
Amphenol APH has an Earnings ESP of +2.90% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for APH’s third-quarter 2022 earnings is pegged at 75 cents per share, suggesting an increase of 15.4% from the prior-year reported figure.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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