Adobe’s Shares Up 5% in After-Hours Trading Following Earnings Announcements

Key Takeaways

• Adobe reported Q1 earnings per share of $3.80, beating analysts’ estimates of $3.68 per share.
• The company’s Q1 revenue was $4.66 billion, up 9% YoY and higher than the expected $4.62 billion.
• Adobe’s Digital Media segment, which includes Creative Cloud, saw $3.4 billion in revenue, up 9% YoY.

Overview

On Wednesday, the Dow and S&P 500 closed lower due to Credit Suisse issues, despite expectations of a smaller US rate hike. However, Nasdaq managed slight gains. Late trade recovery was observed after the Swiss government discussed options to stabilize Credit Suisse.

Credit Suisse Shares Rally on Statement by Swiss Authorities while Adobe Beats Q1 Estimates

• Credit Suisse shares surged 7% after Swiss regulators confirmed that the bank is well-capitalized and promised extra liquidity if required.
• Adobe shares rose 4.6% after the software company posted Q1 earnings of $3.80 per share and revenue of $4.66 billion, beating analysts’ expectations.
• Five Below shares fell 3% in after-hours trading on its muted Q1 outlook despite reporting revenue that exceeded Wall Street’s expectations and in-line earnings.
• PagerDuty stock rose 3% after reporting Q4 earnings of 8 cents per share and $101 million in revenue, beating analysts’ estimates.
• UiPath shares skyrocketed 12% after the automation software company’s Q4 earnings exceeded expectations with an adjusted EPS of 15 cents and revenue well above estimates.

Swiss National Bank Assures Credit Suisse’s Liquidity

The Swiss National Bank and Swiss Financial Market Supervisory Authority issued a statement saying that Credit Suisse is currently well capitalized and meets the capital and liquidity requirements for systemically important banks.

The central bank will also provide additional liquidity if necessary. Regulators tried to reassure investors by saying that the failure of two U.S. regional banks in the past week does not pose a direct risk of contagion to Swiss banks.

The statement comes after Credit Suisse’s shares fell 13.9% on Wednesday, following news that its largest investor, Saudi National Bank, could not provide further financial assistance.

Adobe Reported Q1 Earnings Per Share of $3.80, Beating Analysts’ Estimates of $3.68 Per Share.

Adobe reported strong fiscal first-quarter results on Wednesday, beating Wall Street expectations and lifting its full-year forecast.

The company posted adjusted earnings of $3.80 per share, compared to the expected $3.68 per share, according to Refinitiv, while revenue came in at $4.66 billion, beating the expected $4.62 billion.

The Digital Media segment, which includes the popular Creative Cloud design software bundle, generated $3.4 billion in revenue, up 9% from a year ago, while Adobe’s Digital Experience segment, which features Marketo marketing software, contributed $1.18 billion in revenue.

For the second quarter, Adobe anticipates adjusted earnings per share of $3.75 to $3.80 and revenue of $4.75 billion to $4.78 billion. The company also increased its adjusted earnings forecast for the 2023 fiscal year to $15.30 to $15.60 per share, up from $15.15 to $15.45, and expects $1.7 billion in net new annualized recurring revenue from Digital Media.

Adobe CEO Shantanu Narayen said on a conference call with analysts that the company has completed the discovery phase of the U.S. DOJ second request regarding its pending $20 billion acquisition of design software startup Figma.

Adobe’s shares rose 5% in after-hours trading following the announcement. Excluding the after-hours move, Adobe shares have declined 1% so far this year, while the S&P 500 index has risen 1%.