Adobe’s stock fell as much as 5 percent on Thursday (June 14), even though the company reported better-than-expected earnings for the second quarter of its 2018 fiscal year, which ended on June 1.
According to CNBC, excluding certain items, the company reported $1.66 in earnings per share, compared with the $1.54 in earnings per share that was expected by analysts. In addition, revenue came in at $2.20 billion, more than the $2.16 billion analysts had predicted.
Adobe reported that revenue rose 24 percent year over year, with most of it generated from subscriptions, which were up almost 30 percent year to year.
The quarter saw Adobe enter into a definitive agreement to acquire Magento Commerce for $1.68 billion, subject to adjustments. The addition of the Magento Commerce Cloud will enable commerce to seamlessly integrate into the Adobe Experience Cloud, delivering one platform that serves both B2B and B2C customers around the world.
Magento brings digital commerce enablement and order orchestration to the Adobe Experience Cloud for both physical and digital goods across a range of industries, from consumer-packaged goods (CPG) to retail and manufacturing.
“Embedding commerce into the Adobe Experience Cloud with Magento enables Adobe to make every moment personal and every experience shoppable,” said Brad Rencher, executive vice president and general manager, digital experience, Adobe.
In addition, the company appointed John Murphy as its new chief financial officer, replacing Mark Garrett.
According to CEO Shantanu Narayen, another move that helped the company in the quarter was its partnership with Microsoft.
In terms of the future, Adobe said it’s expecting $1.68 in earnings per share, excluding certain items, on revenue of $2.24 billion in the fiscal third quarter. Analysts had expected the company to forecast $1.61 in earnings per share, excluding certain items, on $2.23 billion in revenue for its fiscal third quarter.
Murphy said that the recent U.S. tax reform should give the company a 7 percent tax rate in the fiscal third and fourth quarter.