Adobe’s fourth-quarter profit fell and its overall revenue shrank, it reported Thursday. But its shares are soaring to a record today, thanks to some cloudy news.
The cloud we speak of is where Adobe has been moving its software business since late 2011. The San Jose company continues to say the transition will eat into its earnings. But it also said subscriptions to its online offerings of programs such as Photoshop grew to 1.4 million, up 402,000 from the previous quarter. That’s what investors liked hearing.
“Investors are giving Adobe’s management team credit for its progress despite the light profit to this point, and will likely continue to do so, as long as the number of new cloud subscribers continue to outpace expectations,” Josh Olson, Edward Jones technology analyst, told Reuters.
But not everyone’s feeling optimistic. “Investors will wake up to economic gravity and recognize that Adobe is mispriced too high,” Kevin Stadtler, president of hedge fund Stadtler Capital Management, told Bloomberg.
Shares of Adobe are up more than 12 percent to $60.78 as of this post. Their previous closing high was $57.55, which they reached last month.
Photo of Adobe Systems headquarters in San Jose from Associated Press archives