Rick Wilking/Reuters
- Adobe shares rose more than 4% on Wednesday morning during pre-market trading after reporting better-than-expected revenue and earnings per share.
- The creator of Photoshop generated $2.74 billion in sales for the second quarter thanks to strong growth in its Digital Media business. That beat analyst expectations.
- Guggenheim securities upped its price target for the company to $300 from $275.
- Watch Adobe trade live.
Adobe, the company behind Photoshop, topped Wall Street estimates during the second quarter of 2019, sending shares up more than 4% before the opening bell on Wednesday.
After the closing bell on Tuesday, Adobe reported year-over-year revenue growth of 25% for the second quarter, hitting $2.74 billion. That exceeded analyst estimates of $2.7 billion. Earnings per share of $1.83 also beat Wall Street estimates of $1.78.
"Adobe's continued momentum is being fueled by the explosion of creativity across the globe and the widespread business transformation agenda to deliver engaging customer experiences," Shantanu Narayen, president and CEO of Adobe, said in a press release on Wednesday.
Adobe's Digital Media business, which includes brand-name cloud services like Photoshop and Premiere, generated $1.89 billion in revenue, a 22% increase from the second quarter last year. The company also added an additional $406 million in annual reccuring revenue to its digital media business.
Guggenheim Securities increased its price target for Adobe to $300 from $275 and maintained its "Neutral" rating after the company's second quarter results.
"Our forecasts underestimated the sustainability of Adobe's core business and the leverage that would flow through once the M&A headwinds subsided and synergies started to flow through," Ken Wong, an analyst at Guggenheim said in a research note on Wednesday.
Adobe's maintained its third-quarter guidance of $2.8 billion in revenue and earnings per share of $1.95.
Adobe is up roughly 22% so far this year.
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