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Adobe (ADBE) to Report Q3 Earnings: What's in the Offing?

Adobe Inc. ADBE is set to report fiscal third-quarter 2021 results on Sep 21.

For the quarter, the company expects non-GAAP earnings of $3.00 per share. The Zacks Consensus Estimate for earnings is also pegged at $3.00 per share, indicating growth of 16.7% from the year-ago reported figure.

The company projects total revenues of $3.88 billion in the fiscal third quarter. The consensus mark for the same is pegged at $3.88 billion, implying growth of 20.3% from the year-ago reported figure.

The company surpassed the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 8.37%, on average.

Adobe Inc. Price and EPS Surprise

Adobe Inc. price-eps-surprise | Adobe Inc. Quote

Factors to Consider

The growing work-from-home trend is expected to have accelerated the demand for digital documents.

The increasing demand for data and insights, content and personalization, customer journey management, commerce, and advertising are expected to have benefited the company’s performance in the to-be-reported quarter.

Solid momentum across Digital Media and Digital Experience segments is likely to have driven the top-line growth 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 during the fiscal third quarter. Adobe expects Digital Media revenues to grow by 22% year over year in the fiscal third quarter. The Zacks Consensus Estimate for the same is pegged at $2.8 billion, indicating growth of 20.7% from the year-ago reported figure.

Growing adoption of Adobe Lightroom, Photoshop and creative mobile applications is expected to have accelerated growth in Creative revenues in the quarter under review.

Increasing uptake of Acrobat and strong momentum across Acrobat Web services might have contributed well to the Document Cloud revenues.

Rising demand for Acrobat Mobile and Adobe Scan, along with strength across Adobe Sign, is expected to have benefited Document Cloud further during the fiscal third quarter.

Solid enterprise adoption of Acrobat and Document Cloud services is anticipated to have driven growth in Document Cloud annualized recurring revenues.

In addition to Digital Media, strong momentum across Adobe Experience Cloud 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 business in the quarter under review.

The company anticipates Digital Experience revenues to grow 21% on a year-over-year basis. The Zacks Consensus Estimate for the same is projected at $944 million, reflecting growth of 12.6% when compared with the prior-year quarter’s reported figure.

What Our Model Says

Our proven model conclusively predicts 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 +0.37% and a Zacks Rank #3.

Other Stocks to Consider

Here are some other stocks to consider as our model shows that these too have the right combination of elements to beat on earnings this time around.

Canon, Inc. CAJ presently has an Earnings ESP of +4.00% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

ASGN Incorporated ASGN has an Earnings ESP of +2.6% and a Zacks Rank #2 at present.

General Mills, Inc. GIS currently has an Earnings ESP of +0.36% and a Zacks Rank of 3.


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General Mills, Inc. (GIS): Free Stock Analysis Report
 
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ASGN Incorporated (ASGN): Free Stock Analysis Report
 
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