Shares of Adobe Systems (ADBE) spiked about 8% Wednesday morning as investors and analysts alike cheered the Photoshop maker's earnings beat and decision to reaffirm guidance.
While Adobe’s fiscal second-quarter profits tumbled 66% year-over-year due to higher expenses, its subscriber base grew by 221,000 from the first quarter, buoying sentiment.
The company’s non-GAAP EPS of 36 cents bested the Street’s view of 33 cents and revenue slid 10% to $1.01 billion, matching consensus calls from analysts.
Adobe said its marketing cloud quarterly revenue hit $229.6 million as bookings jumped at least 25%.
Looking ahead, Adobe said it is maintaining its prior call for full-year EPS of $1.45 on sales of about $4.1 billion. Those numbers would essentially meet current forecasts from analysts.
Adobe sees non-GAAP EPS of 29 cents to 35 cents in the current quarter, compared with the Street’s view of 35 cents. Revenue is seen ranging between $975 million and $1.03 billion, compared with estimates from analysts for $1.01 billion.
In response to the latest results, analysts at Bank of America Merrill Lynch (BAC)upgraded Adobe to “buy” from “neutral” on Wednesday.
Bernstein also lifted its price target on Adobe to $54 from $52 and maintained an “outperform” rating.
Shares of San Jose-based Adobe soared 8.35% to $46.98 in premarket trading on Wednesday, putting them on pace to extend their 2013 advance of about 15%.