Adobe Systems (ADBE), a software company, has announced a 46.16 percent plunge in profit for the quarter ended Aug. 29, 2014. The company earned $44.69 million or $0.09 a share in the third-quarter compared with $83 million or $0.16 a share a year ago. Non-GAAP earnings per share came in at $0.28, when analysts expected $0.26.
Revenue during the third-quarter went up marginally 1.03 percent to $1005.41 million from $995.12 million in the last year period. Gross margin contracted by 91 basis points over the last year period to 84.31 percent. Operating income dropped to $74.18 million, compared with $110.35 million in the previous year period. That has resulted in contraction of 371 basis points in operating margins to 7.38 percent.
''Adoption of Creative Cloud and Adobe Marketing Cloud continues to accelerate,'' said Shantanu Narayen, president and chief executive officer, Adobe. ''We are the leader in both of these high-growth categories and have a rapidly growing pipeline, setting us up for a strong finish to the year in Q4.''
''In Q3, 63 percent of our revenue was recurring, demonstrating the continued success of our business model transformation,'' said Mark Garrett, executive vice president and chief financial officer, Adobe. ''In addition to momentum with Creative Cloud adoption, our team drove strong bookings growth with Adobe Marketing Cloud.''
Working Capital
Adobe Systems has witnessed a decline in the working capital over the last one year. The company's working capital stood at $2034.22 million as at Aug. 29, 2014, down $522.79 million or 20.45 percent from $2,557 million on Aug. 30, 2013. It registered a decrease in current ratio to 1.91 as at Aug. 29, 2014 from 2.92 on Aug. 30, 2013.
Days' sales outstanding were almost stable at 45 days for third quarter when compared with the last year period. The company's days' payable outstanding went down to 18 days for third quarter from 23 days for the last year period. This reflects that the company has made early payment to vendors compared to prior year period.
Debt Position
Adobe Systems has witnessed a decline in the total debt over the last one year. As on Aug. 29, 2014, total debt stood at $1508.26 million, down 0.76 percent or $11.58 million, from Aug. 30, 2013. The company's total debt was 14.37 percent of total assets as on Aug. 29, 2014, compared with 14.85 percent on Aug. 30, 2013. Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has declined to 5.55 from 6.59 in the same period last year.
Shares of the company gained $0.46 or 0.65 percent to settle at $70.73 on Tuesday.
